Oral Answers to Questions

TREASURY

The Chancellor of the Exchequer was asked—

Pension Funds

Mark Francois: What recent representations he has received from pension funds on the effect of his policies on the value of their investments.

Ruth Kelly: The Treasury receives representations from a range of financial services organisations, including pension funds. The Government have introduced reforms that have delivered, and will continue to deliver, a stable economic environment based on low levels of inflation and sustainable growth. This environment is designed to benefit all investors, including pension providers, because it supports longer-term investment and planning.

Mark Francois: I thank the Minister for that reply. We know that she and the Chancellor take a keen interest in the subject of pensions and of early retirement. Is she aware that the Government's changes to the taxation of pensions are now costing each individual contributing to a pension scheme about £500 a year in tax?

Ruth Kelly: The hon. Gentleman is talking absolute nonsense. The changes in the tax credit system were an essential part of a wider range of corporation tax reforms that included cutting both main and small companies' corporation tax rates. They removed a major distortion in the tax system, and were designed to encourage long-term investment.

John Cryer: Does my hon. Friend agree that the trend towards ending final salary pension schemes, which I assume the hon. Member for Rayleigh (Mr. Francois) was hinting at, started long before Labour came into office, about 30 or 40 years ago? The trend has a lot more to do with corporate greed and the pension contribution holidays that were taken in the 1980s during the casino boom that was assisted and encouraged by the then Conservative Government.

Ruth Kelly: My hon. Friend makes some interesting points. The shift from final salary schemes to defined contribution schemes has been going on since the 1960s. There are several reasons for that, including increasing life expectancy. It is not the shift itself which is a disaster, but the fact that companies can use the shift as an excuse to cut contribution rates. Clearly we must establish a consensus. It is the responsibility of employers to provide for their employees. They should not enter into such a shift without giving it very careful consideration.

Michael Howard: My hon. Friend the Member for Rayleigh (Mr. Francois) was absolutely accurate in his figure. It is a great shame that the Financial Secretary cannot bring herself to accept what are entirely factual and accurate figures concerning the damage caused by the Government's policies. Will she now accept what everyone knows—that, quite apart from the pensions tax, the disproportionate fall in the London stock market, contributed to by the policies of the Chancellor, has hit pension funds hard?
	A month ago, to help the Prime Minister defend the pensions tax at Question Time, the Chancellor whispered some advice in his right hon. Friend's ear. Can the Financial Secretary shed light on whether it was on the basis of that advice that the Prime Minister told the House that the stock market was "massively up" on where it was five years ago, or had he misheard the Chancellor?

Ruth Kelly: I find it incredible that the right hon. and learned Gentleman should attempt to blame the Government for a global fall in stock markets. Nor would he expect me, as a responsible financial services Minister, to comment on day-to-day or even month-to-month movements in the stock market. The point is that the economy is fundamentally sound. We, as a Government, are taking the action necessary to make it easier and simpler for people to save and to raise the overall level of saving in the economy.

Anne Begg: I am concerned that a number of companies are closing their pension schemes, forgetting that they had the good times and forgetting that they have taken pensions holidays. Does my hon. Friend agree that they are using the downturn in the stock market and supposed Government policies as an excuse to end final salary schemes? We must be more honest. Companies are using those things purely as an excuse. The mark of a good employer should be to have a good pension scheme and ensure that employees are well protected in their old age.

Ruth Kelly: I completely agree with my hon. Friend's point. Employers have a responsibility to their employees to provide reasonable terms and conditions and a package that is attractive both from day to day and in the longer term. We are taking these issues extremely seriously. We have recently had two reviews. One—the Pickering review—considered occupational schemes. The other considered private sector personal provision. Key to this is making the system as simple as possible to administer, making it as easy to save as possible. The Government will be responding to those reviews, together with the Inland Revenue review of tax, in the autumn.

Vincent Cable: Is the Government's primary concern at present to encourage savings for pensions and long-term investment, or to encourage dis-saving to sustain spending and economic activity?

Ruth Kelly: Of course the Government are committed to increasing long-term levels of saving. I should point out to the House that real gross household savings have been robust in recent years, particularly in long-term retail savings products. Clearly, however, there are issues that we must address. Ron Sandler, when analysing the issues in his recent report, pointed out that long-term savings have been robust, but that there is a problem with middle and lower-income families and their ability to save. That is why he proposed a new range of stakeholder products that will make it easier and simpler for them to do so.

Dennis Skinner: Is it not a sad fact that pensions unfortunately have to suffer the vagaries of what happens on the stock exchange, which is nothing more than a glorified betting shop? During the pit strike, for instance, the index fell to below 1,000 points. Yesterday, after the Leader of the Opposition spoke about the vagaries of the stock exchange and falls in the stock market, I went outside and looked at the figures; the index was up by 160 points half an hour after he spoke.

Ruth Kelly: I thank my hon. Friend for those interesting observations. The important point here is that we have the right framework for pensions, based on a partnership between the state, the individual and industry. It is this Government who have tackled pensioner poverty, bringing in the minimum income guarantee. It is this Government who have enabled all pensioners to share in the country's rising prosperity, and it is this Government who next year will bring in pensioner credit, which will make pensioner households significantly better off.

Economic Growth

Desmond Swayne: What his most recent estimate is of the rate of growth in gross domestic product.

Gordon Brown: Despite there being no growth at all in world trade last year, the UK grew by just under 2 per cent., the fastest growth rate of the G7. The growth forecast for 2002 of 2 to 2½ per cent. was set out in the Budget. I shall report again to the House in the autumn when the pre-Budget report is delivered.

Desmond Swayne: Ministers may discount warnings about the deteriorating fiscal position and the need for tax increases from Schroder Salomon Smith Barney and PricewaterhouseCoopers on the grounds that they are, after all, accountants. But when Vicky Price, the new adviser to the Department of Trade and Industry, adds exactly the same warning, is it not time that the estimates were reviewed?

Gordon Brown: The fiscal rules that we set down in 1997 give a stability to the British economy. We have met those fiscal rules every year, despite the Opposition saying every year that they would never be met. We will continue to meet our fiscal rules and disciplines; we will do that so we can finance higher levels of public expenditure while having the fiscal discipline that is necessary.

Denzil Davies: Does my right hon. Friend agree that one factor that would have an adverse effect on growth in GDP would be if the very low levels of inflation—which, of course, are welcome—were to slide into deflation? Given that over a range of manufacturing goods prices seem to be falling, will the Treasury start thinking about how to avoid deflation, since at times of deflation central banks are usually superfluous?

Gordon Brown: We made the Bank of England independent and set it an inflation target of 2½ per cent. It is the duty of the Bank to meet that target and it has done so for the past three to four years. It is a symmetrical inflation target; because of that, problems that may arise from deflation are as important as problems that arise from inflation.

John Bercow: Was it a lack of confidence in his growth forecast or an uncharacteristic coyness that caused the Chancellor to duck no fewer than six requests from James Naughtie on the "Today" programme on Tuesday to say whether he envisaged further tax rises in this Parliament?

Gordon Brown: I said to Mr. Naughtie—I repeat it to the shadow Chief Secretary—that our spending plans until 2006 are financed by the measures that we announced in the Budget. Indeed, our spending plans for the national health service until 2008 were financed by the measures that we put forward in the Budget. It is now up to the Conservatives to tell us whether they support spending on education and health, which is in the national interest.

John McFall: My right hon. Friend will be interested to know that the experts who appeared before my Committee yesterday said that the spending plans were eminently prudent and that the figures were in the books. That is welcome news in terms of spending for the whole country. However, does my right hon. Friend agree that the question of targets needs to be addressed? There is a proliferation of targets and we must ensure that they do not get in the way of delivery on the ground.

Gordon Brown: First, targets are important because they set objectives for Departments and services. It is by setting targets and objectives that we are making progress in reducing health service waiting lists; getting up literacy and numeracy standards in our schools; getting more young people to stay on in school; and meeting all our objectives, as we will do during this Parliament and beyond, for health and education. As far as the fiscal position is concerned, my hon. Friend knows from the expert advice that he has been given that not only have we met our fiscal rules but those rules are drawn on a cautious basis with a margin. As far as the current balances are concerned, they will be £3 billion, £9 billion, £7 billion, £9 billion and £7 billion; those are several billions, which is the margin for prudence that I set out in the Budget statement. Again, the issue, which has been being raised all this week, is that we want to spend money on health and education, while the Opposition oppose such spending.

Business Activity

Philip Hammond: What recent discussions he has had with the Governor of the Bank of England regarding trends in levels of business activity in the United Kingdom.

Andrew Murrison: What recent discussions he has had with the Governor of the Bank of England regarding patterns of business activity with specific reference to (a) region and (b) sector.

Gordon Brown: I last met the Governor of the Bank of England yesterday for the Standing Committee on Euro Preparations, and I am today publishing the sixth progress report on euro preparations. Copies of the report are available in the Vote Office and the Library.
	On business activity by sector and by region, I regularly discuss those matters with the Governor, and hon. Members will wish to know that the Government today accepted undertakings from the four main clearing banks that, from no later than 1 January next year, they will pay interest of no less than 2.5 per cent. below the base rate on current accounts or offer free banking services to their small business customers in England and Wales. That will be of great help to many of the 3.5 million small businesses throughout the country.

Philip Hammond: Would the Chancellor nevertheless agree that the level of business activity tomorrow depends critically on the level of investment today, and that that investment depends on business confidence, which has been severely damaged over the past five years by the Government's imposition of £12 billion a year in extra taxes and regulatory burdens on business? It was further damaged by the lack of consultation before the Budget announcement of increases in national insurance contributions and North sea taxes, and will it not be damaged again by this morning's revelation that the Government's union paymasters are demanding a massive expansion of trade union powers and rights in exchange for the continued funding of the Labour party?

Gordon Brown: What business wants and needs is economic stability. Under the Conservatives, inflation averaged 6 per cent.; under Labour it has averaged 2 per cent. Under the Conservatives, unemployment averaged more than 10 per cent.; under Labour it is averaging 5 per cent.—indeed, it is the lowest it has been since 1975.
	As far as business investment is concerned—this is perhaps an answer to those who talk about the dividend tax credit, as well—the share of business investment as a percentage of gross domestic product has risen significantly under this Labour Government. It was 10 per cent. and 11 per cent. in 1995–96, 14 per cent. by 1998, 13.9 per cent. in 1999, 13.7 per cent. in 2000 and 13.4 per cent. in 2001. So we have raised significantly the share of business investment in national income, and the hon. Gentleman should welcome that, not criticise it.

Andrew Murrison: Earlier this year, Mr. Michael Large, a small business man, reported in Small Business News:
	"I sit here sometimes and think: I am not the managing director of a company, but an unpaid tax collector or filler of forms."
	No doubt small businesses will welcome the Chancellor's words and look to see what they mean in practice, but the CBI is warning that business confidence is falling, and that is particularly worrying in the south-west and in the service sector. Does the Chancellor accept that the bureaucracy and red tape that his Government have introduced have hampered small businesses, especially in the south-west and in the service sector, and what is he doing about it?

Gordon Brown: As regards regulation, the shadow Chancellor said about his own Government:
	"Conservatives too were less responsive to these concerns, and less effective in deregulating, than we should have been."
	So the verdict on the last Conservative Government is very clear.
	On the other concerns of small business, 700,000 businesses will benefit from the new VAT simplification scheme that we are introducing as a result of consultation with small business. That will cut the amount of paper forms and form filling and will be a major reason why there will be less red tape for small businesses.
	On the small business corporation tax rate, this Government cut it from 23p to 20p, then, in the last Budget, to 19p. This Government introduced a 10p corporation tax lower rate, then abolished it in the Budget, meaning that 150,000 businesses will pay no corporation tax whatsoever. Again, the hon. Gentleman should welcome our measures for business.

Geraint Davies: Does my right hon. Friend accept that with 28.5 million people with jobs, there are more people in work than ever; that inflation is at its lowest for 27 years at 1.5 per cent.; that interest rates are at their lowest for 38 years; and that wage increases are modest at less than 4 per cent. Does he accept that those are the conditions for business to invest and succeed, and that it will do that under his leadership?

Gordon Brown: Proportionately, the organisation that has suffered most job losses in the past five years is the Conservative party. It lost so many Members of Parliament in 1997 and was unable to recover in 2001. The Opposition should welcome our actions: 1.5 million more people are in jobs; our measures have led to a 70 per cent. cut in youth and long-term unemployment, and unemployment is lower than in America, Japan and the euro area.
	If we had taken the advice of the Conservative party, we would have made the wrong decisions. We made the Bank of England independent, and the Conservatives opposed that; we created the Financial Services Authority, but the Conservatives opposed it; we created the new deal, and they opposed that, too. They advised us not to implement the minimum wage; the shadow Chancellor went around the country saying that it would cost 1 million jobs. However, we introduced the minimum wage and created 1 million jobs.

George Mudie: I welcome the Chancellor's statement that the Government have managed to persuade the arrogant four major banks to end the monopoly position on small businesses. As my right hon. Friend knows, that cost small businesses £750 million over three years. Will he assure hon. Members that he will maintain the pressure on the four banks to accept the Competition Commission's other recommendations on their position so that the monopoly that has harmed small businesses and consumers is broken?

Gordon Brown: I am grateful to my hon. Friend, who, as a member of the Select Committee on the Treasury, takes an interest in such matters. The shadow Chancellor should be on his feet welcoming the fact that the four large banks have accepted the Competition Commission's recommendations and that, therefore, either interest rate charges for many thousands of businesses will be reduced in the next few months, or they will get a free service from the banks. That is the result of a Competition Commission referral that was made under the Labour Government and of recommendations to improve competition in the banking market. I wish that there were all-party support for that, and I hope that Conservative Members will recognise that the 3,000 or 4,000 small businesses in their constituencies will welcome it. Conservative Members should also welcome it instead of opposing it.

Peter Tapsell: The Chancellor is proud of the current very low rate of inflation, but what does it signal? Did he point out to the Governor that the current rate of inflation, whether asymmetrical or not, is considerably below the Bank of England's target? Does he recall that after the 1929 stock market crash, public service index-linked pensions fell year by year until 1936? Does he have any fears that we may move into negative inflation? That would be extremely damaging, as it was in the 1930s, to business activity.

Gordon Brown: This is the first time that the hon. Gentleman has asked me a question without mentioning the word "Europe". The Opposition cannot have it both ways. When we introduced our spending review in 2000, they said that it was unsustainable and would cause galloping inflation. The Opposition should welcome the current low rate of inflation. However, the shadow Chancellor presided over 10 per cent. inflation, whereas we have 2 per cent. inflation.

Barry Sheerman: Does my right hon. Friend agree that, after hard times, it is good that the manufacturing sector has flipped back into life in the past two quarters? However, does he also agree that, although the news about extra resources and a broader remit for regional development agencies is good, regions that were much more dependent on manufacturing will need even more help? Only this week, we had bad news about a pit closure in Yorkshire. We will need help with jobs, reinvestment and new wealth.

Gordon Brown: I am grateful to my hon. Friend and recognise the interest that he takes in these matters. The closure over the next two years of the Selby coalfield is something that we all regret. I hope that the measures that have been put in place—there will be a taskforce to create new job opportunities in the area and additional redundancy payments for the miners, including those who have lost their jobs recently—will at least do something to mitigate the blow of the very sad announcement earlier this week.
	On manufacturing and the general industrial economy, the research and development tax credit that we announced in the Budget, which will now be for large firms as well as small ones, the measures that we announced in the spending review to boost science—this is especially important in respect of the technological products that could lead to manufacturing successes in future—and the rise in regional development agency budgets from £1.6 billion to £2 billion over the next few years are a means by which we can build modern manufacturing strength in every region and nation of the United Kingdom. I hope that there will be a general welcome for what the regional development agencies, the research and development tax credit and the investment in science can do.

Howard Flight: The Chancellor made no mention of our productivity performance. Back in 1997, he asserted that the first challenge was to increase our productivity, and I agree with him: productivity is the ultimate measure of our economic success or failure. Why, then, has Britain's productivity growth rate over the past five years been half that for the last five years of Conservative government? Why have the figures for the first quarter of this year shown not only lower growth, but an actual fall in productivity?

Gordon Brown: When we came to power, we inherited a situation in which manufacturing productivity had fallen in 1995 and 1996. We had to rebuild with a number of very difficult measures the conditions for business investment and productivity growth in this country. If the hon. Gentleman considers the situation in 2001, for example, he will see that what happened in the manufacturing sector was this: textiles, footwear and clothing were up by almost 4 per cent.; food, drink and tobacco productivity were up by 4 per cent.; paper, pulp and printing were up; chemicals were up by 7.1 per cent; and rubbers and plastic were up by 3.1 per cent.
	What happened in the manufacturing sector last year is that, because of what was happening throughout the world in information and technology, there was a drastic fall in productivity as a result of a major fall in output—in some cases, it was 50 per cent.—in the telecommunications industry. That was happening in America, the rest of Europe and Britain, but the general gains being made in manufacturing industry are again something that the hon. Gentleman could welcome. I repeat that the only Governments in the past 25 years under whom productivity and manufacturing productivity have fallen have been Conservative Governments.

Barry Gardiner: Will my right hon. Friend confirm that business investment growth in the past five years has been at 6.2 per cent., in comparison with long-term business investment growth of 3.5 per cent.? Of course, that long-term 3.5 per cent. rate was 0.2 per cent. up on the 18 years of Conservative Government, when business investment growth was at 3.3 per cent.

Gordon Brown: The right hon. Member for Wokingham (Mr. Redwood), who is waiting to pounce on the shadow Chancellor, must despair of those on the Conservative Front Bench and the way in which they put their case about the national economy. We have created greater stability by making the Bank of England independent—but initially the shadow Chancellor opposed that. We have created a better competitive framework by making the Competition Commission independent—and originally the Conservatives opposed it. We have created a new deal that gives people, through responsibilities and rights, the opportunity to get back to work—and the Conservative still oppose the new deal. We are creating the conditions for both stability and growth. It is a pity that on all the major decisions made in the past five years, the shadow Chancellor and the Conservative Opposition were generally against them.

Department of Health (Public Service Agreement)

Stephen O'Brien: If he will make a statement on the progress of public service agreement targets for the Department of Health.

Gordon Brown: A progress report is included in the 2002 Department of Health departmental report, which is published today. Since 1997, more than 100,000 fewer people are on the waiting lists; there are 39,000 more nurses, more than 10,000 more doctors and 37 per cent. more heart operations; more than 90 per cent. of people urgently referred by their GP with suspected cancer now see a specialist within two weeks; and there are 50 per cent. more CT scanners and 80 per cent. more MRI scanners; and last year, for the first time in 30 years, there was an increase in the number of NHS beds.

Stephen O'Brien: We all know that the Government favour target setting over reform, and, as the Chancellor said earlier in his answer to the hon. Member for Dumbarton (Mr. McFall), the choice of public service agreement objectives reflects the Government's priorities. In that case, is the absence of a target for the number of care home beds a fair and true reflection of the Government's refusal to acknowledge that there is a real crisis in our care homes today?

Gordon Brown: The hon. Gentleman should wait for the statement by the Secretary of State for Health about the 6 per cent. real-terms increase in social services expenditure that I announced last Monday, and for the announcements in that statement about new measures that will be introduced. The fact is that, if we want to increase the number of care home beds and to improve social services for the elderly, we are faced with a choice: do we spend more money or less? We will spend the money; the Conservatives would make more charges.

James Plaskitt: Under the public service agreement, some specific targets have been set for this year. One is that in-patients should not have to wait more than 12 weeks; another is that out-patients should not have to wait more than 26 weeks. May I tell my right hon. Friend that both those targets have been met in full at Warwick hospital in my constituency? Is not this a case of service agreements providing precise targets that are being delivered thanks to the increased investment that the Government are putting in?

Gordon Brown: There are 300,000 more operations taking place in the national health service, and 100,000 fewer people on the waiting list. The maximum waiting time—which was more than 18 months when we came to power—is gradually being reduced to 15, then 12, nine and six months. Those are the aims that are being pursued in the targets that we have set the national health service. The question is, however, when making the reforms and setting the objectives—including giving more power to the primary care trusts—are we prepared to put the necessary money in to finance the expansion of health care? Everybody agrees—in any report that is produced—that the health service needs more money, except one group of people: the Conservatives, who want charges and cuts instead of spending.

Matthew Taylor: Since about half of all the Government's 1998 and 2000 departmental targets appear to have been unmet, changed, failed or dropped, will the Chancellor oblige us by giving a single example of a Department that has been penalised, and telling us what penalty followed?

Gordon Brown: The issue about targets is that, when they are not met—

Richard Bacon: Agriculture.

Gordon Brown: The Agriculture Department has been completely reorganised—

Richard Bacon: Fat lot of good it has done. It has got worse, much worse.

Gordon Brown: The hon. Gentleman now says that he opposes what we are doing to give more money to sustainable farming, and the public expenditure announcement that we will give more money to the Department for Environment, Food and Rural Affairs. The important thing is that, when a Department goes wrong, action is taken. Why did the hon. Member for Truro and St. Austell (Matthew Taylor)—who now calls himself the shadow Chancellor; he is the shadow Chancellor who resides in Truro, as opposed to the one who resides in Folkestone—not welcome the action that we proposed on Monday to tackle failing institutions, including hospitals, schools, colleges, prisons and the probation service? In all those areas, we take action if there are failing institutions, and we also take action if permanent secretaries or Departments fail.

James Purnell: Does my right hon. Friend think that new charges for GP visits should be introduced to finance the NHS, or indeed that it is a Stalinist creation?

Gordon Brown: At the last general election, the Conservative party stood on a policy that the national health service would be free at the point of need. [Hon. Members: "Order."] Since then, a policy of charging, which the Conservatives are now proposing, has been put forward by the shadow Chancellor. The policy of charging is wrong. [Interruption.]

Mr. Speaker: Order. Sometimes I cannot hear what is being said because so many people are shouting. I call the shadow Chancellor.

Michael Howard: May I say how greatly I am looking forward to debating the Chancellor's spending plans with him next Tuesday? Meanwhile, will he explain why, in his panoply of new targets set on Monday, that that for NHS efficiency savings has been reduced from 3 to 2 per cent. and that for ensuring that everyone should be expected to achieve the level of the best over five years has been dropped completely?

Mr. Speaker: Order. Before the Chancellor answers, I ask him not to talk about Conservative party policy.

Gordon Brown: It does not bear talking about.
	We set targets in 1998, which have generally been met. We set targets in 2000, which run through to 2004. On the basis of the assessment that we made, we are setting new targets to 2006. The NHS is becoming more efficient. That is why the efficiency target is as it is for the next round. Equally so, we have set new targets, both for waiting times and waiting lists, and, of course, for the efficiency of hospitals.

Michael Howard: It is a great pity that the Chancellor could not give a direct answer to that direct question. It is an even greater pity that he introduced yet more fiction to his answer. The Government said in their progress report on the efficiency target that they set four years ago, "There has been slippage." Perhaps it would have been better if the Chancellor had stuck with his adviser's phrase of "increased room for catch-up". What happens when there is increased room for catch-up? Instead of trying harder to catch up, the Government drop the target. Does not that expose as a complete sham all the Chancellor's fine words on Monday about matching resources with reforms and results for patients?

Gordon Brown: Absolutely not, because we have reduced waiting times and waiting lists. We have also secured a massive devolution of funding to local health authorities, all of which the Conservatives should have done but never did.
	The number of operations carried out in hospitals has risen by several hundred thousand and we have provided repair and renovation for 96 per cent. of accident and emergency units. On training in medical schools, the numbers will go up from 3,700 entering every year to 5,900. On new equipment in the health service, the number of CT scanners is up 50 per cent. and that of MRI scanners is up 60 per cent. The number of people getting cancer operations and help from heart specialists has gone up as well. In those areas, we have been meeting the demands, but the question is, "Are you prepared to spend the money on the health service?" We are.

Inward Investment

Iain Luke: What further incentives the Treasury will provide to encourage inward investment into the United Kingdom.

Paul Boateng: Announcements made in this year's Budget will further serve to consolidate improvements in the UK's performance relating to inward investment. The extension of R&D tax credits to large companies and the move to exempt corporation tax for capital gains and losses on the most substantial shareholdings in trading companies will make the UK an even more attractive location for foreign investors.

Iain Luke: I thank my right hon. Friend for that answer. Does he agree that the extended R&D tax credit introduced for larger companies in this year's Budget will not only help to sustain high inward investment in this country, but encourage foreign companies already located here to follow the example of NCR in my own city and locate more R&D facilities in the UK, thereby strengthening the likelihood that their corporate presence here will continue?

Paul Boateng: I am grateful to my hon. Friend for the interest that he takes in inward investment generally and the work that he has done in his constituency to promote it. He makes an absolutely accurate point on the impact of the R&D tax credit, but, importantly, linked to Dundee's success in inviting and securing high-tech investment in that constituency are the announcements on science made by my right hon. Friend the Chancellor in the spending review. They will further enhance the competitiveness and success of our efforts to secure inward investment into the UK.

Anne McIntosh: Will the Chief Secretary tell me what the level of inward investment in this country was on 1 May 1997 and what it was on 1 May this year? If it has gone down, to what extent is that attributable to the £25 billion raid on pension tax credits?

Paul Boateng: It has no connection whatever with the so-called £25 million raid on pensions. What the hon. Lady must understand—[Interruption.] The hon. Lady wants figures. Let me give her the figures. Direct investment flows to the United Kingdom increased threefold in the four years to the third quarter of 2001, and by 9 per cent. in the four years to the second quarter of 1997. That is the difference between our record of success in government, and the record of failure of the hon. Lady's party.

Bill Tynan: I welcome the measures that are being taken, but does my right hon. Friend accept that China in particular is attractive to multinational companies at present, and that investment has flowed out of this country and into China? Does he accept the need for analysis of the trading conditions that China is allowing for multinationals, to ensure that we are on a level playing field?

Paul Boateng: My hon. Friend makes a fair point. China's accession to the World Trade Organisation will no doubt assist that process, but it should be stressed that we in the United Kingdom offer a high skills base in terms of employment. What we offer, and what has been enhanced by the Government's decisions, is a stable economic framework and investment in education and skills. As a result, in a recent survey of developed and developing economies by UNCTAD—the United Nations conference on trade and development—the United Kingdom came second only to the United States in terms of its attractiveness to inward investment. That is a good-news story for UK plc.

Exchange Rate

John Burnett: If he will make a statement on the impact of recent exchange rate fluctuations on British business.

Dawn Primarolo: The Government publish two assessments of economic developments and prospects each year, one at Budget time and the other in the pre-Budget report. The forecast published in the April Budget was based on all the relevant information available at that time. We will update our assessment of the economy as usual in the autumn pre-Budget report, taking account of all the relevant factors.

John Burnett: In the unlikely event that the Chancellor can declare his five tests for euro entry to have been met, what will concern British business and the rest of the country is the proposed sterling-euro exchange rate at entry. At what stage will the Chancellor declare that rate? Will the Paymaster General confirm that it will be before any referendum, and also that there will be just one assessment during the present Parliament?

Dawn Primarolo: The hon. Gentleman will have to be patient, and wait for the assessment of the five economic tests in the Government's announcement.

Roger Casale: May I draw my right hon. Friend's attention to an article by Roger Clews of the Bank of England's monetary instruments and markets division? On page 182 of the current "Quarterly Bulletin", he reminds us that the United Kingdom is part of the wider world economy, and furthermore that
	"the strength of international influences on domestic financial markets varies over time, being especially high at times of financial market stress."
	Is it not the case that the platform of economic stability that the Chancellor has established is the best protection in the long term from shocks emanating from the world economy—to the extent that the greatest risk of a shock to the UK's financial markets in the future would be a return of the Conservative Government and their discredited policies of boom and bust?

Dawn Primarolo: As my right hon. Friend the Chancellor has repeatedly told the House, what is essential is that the economic fundamentals are sound—which means low inflation, low interest rates, sound public finances and stable growth.

John Redwood: In recent years, the pound has moved much more dramatically against the euro than against the dollar. Does that not show that we are if anything converging with America and not with euroland? Does the Minister agree that there is no point in assessing other convergence criteria while the exchange rate is gyrating so wildly in terms of the euro? Does that not show that we are nowhere near having converged?

Dawn Primarolo: The right hon. Gentleman is putting his old proposition. What the Government will do is assess the five economic tests, ensuring that the Government's best economic interests—[Interruption.]—the country's best economic interests are met and the best decisions are made for the country, both by Parliament and by the people.

Global Poverty

Win Griffiths: What plans he has to meet his G8 and EU counterparts to discuss further practical steps on tackling global poverty.

Gordon Brown: The Secretary of State for International Development and I will meet churches and non- governmental organisations next week. We will prepare for the International Monetary Fund and World Bank meetings in September, where we will want the announcement that this country is raising development aid from £2 billion in 1997 to £4.9 billion by 2006 to be an encouraging signal for a new international £50 billion financing facility involving all rich countries, the aim being to meet the millennium goals for 2015 of halving poverty, cutting child mortality by two thirds and delivering primary education for every child in the world.

Win Griffiths: I am sure that my right hon. Friend will be aware that he and the Secretary of State for International Development are seen as the shining stars in the firmament of the developing world for the leadership that they have given in increasing the amount of money that we set aside for overseas aid and other programmes to tackle poverty and ill health in the developing world. Given the fact that the tide of Conservative cuts in development aid has been reversed significantly by this Government, would he like to speculate that we might reach the UN target of a contribution of 0.7 per cent. of GNP by the time of the next election?

Gordon Brown: My hon. Friend is drawing me to speculate both about the date of the next election, of which I have no knowledge, and about the next spending round, which is two years from now. What I can say is that as a result of the representations made by many of his constituents, as well as by him and many others in the House, 26 countries have debt relief or are in the debt relief process. For the first time in 20 years, the decrease in development aid budgets has been reversed: they will rise over the next few years as a result of what Britain and the European Community have done and what America has announced in the past few months.
	The key question now is to ensure that that extra money can be used to build better education systems and primary health care systems and to cut poverty in the poorest countries. When we meet the churches and the NGOs next week, we will discuss how we can join them and other international bodies to persuade other countries that it is worth being part of an international effort to tackle poverty.

Michael Weir: I note what the Chancellor has said, but does he not agree that there was at least a feeling from the recent G8 summit in Canada that the developed world had moved more towards putting money into security by giving more to Russia than to eradicating poverty in Africa? What action does he propose to take to ensure that the G8 countries do not lose sight of poverty in Africa?

Gordon Brown: I do not agree with the hon. Gentleman. At the G8 summit, the Prime Minister led with the African initiative that has been his particular contribution to the G8 process during the past year. He pledged that Britain's aid budget to Africa, which was £300 million in 1997, would rise to £1 billion. At the same time, America pledged $5 billion after 2006 and $5 billion in total until 2006. Then the European Union pledged that it would raise its development aid to 0.39 per cent. of its budget, which is an additional $7 billion. By the time of the G8 summit, an additional $12 billion had been pledged. That is why development aid as a proportion of GDP, which had been falling, is rising for the first time in 20 years. When the hon. Gentleman looks at the overall sums and at what we have to do to build on that, he will recognise that the G8 summit, where the Prime Minister led the delegation from Britain, was a great success in pushing things forward, but we need even greater successes in the months and years to come.

Tom Clarke: Is my right hon. Friend aware that, in contrast with the perspective offered by the hon. Member for Angus (Mr. Weir), some of us heard at a meeting this morning that this Government had given more bilateral aid to Rwanda than the whole of the EU and any other country? The Government have an excellent record on that and on debt relief. Does my right hon. Friend agree that the recent lobby on trade indicated that there is indeed a need for a new modern Marshall plan? Does he see that as part of the Government's approach?

Gordon Brown: I am grateful to my right hon. Friend, who takes a big interest in such matters. Over many years he has put the case for aid to Africa and for a constructive and progressive approach to solving international development problems. The issue that we faced was that despite all the good will, net disbursements of aid to Africa had fallen significantly over the 1990s. Only now is that process being reversed. That is why Rwanda, and many other countries, are receiving more money. That is why, for example, Uganda has doubled the number of children in education, and other countries such as Tanzania can do likewise. It is by our collective efforts, and by persuading other countries, that we will build both a development aid budget that is capable of dealing with the problem, and the will to ensure that the money goes, in an untied way, to education, health and anti-poverty programmes.

Public Sector Pensions

Nicholas Winterton: What assessment he has made of the effect of his policies on public sector pension provision.

Ruth Kelly: Prudent financial and economic management has ensured that the finances of the public services are on a sustainable basis. Through the spending reviews and other initiatives we ensure that public sector pension schemes are managed efficiently and provide cost-effective recruitment and retention of staff.

Nicholas Winterton: The welfare and income of all pensioners must be central in any civilised and caring society, so will the Minister acknowledge the depth of concern felt by millions of public sector pension contributors about the crisis in funded pensions? Will the Government finally admit the connection between that crisis and their £5 billion a year tax on pensions, which has cost each pension contributor £400 a year? The Government must accept some responsibility for the crisis in our pensions today.

Ruth Kelly: I should point out to the hon. Gentleman that the tax changes that affected pension funds do not affect public sector pension funds; those are primarily unfunded schemes.

Nicholas Winterton: I said all pensioners.

Ruth Kelly: Of course we take the issue of saving for the long term, especially for pension provision, extremely seriously. That is why the Government commissioned the Sandler report to examine private sector pension provision, and also why we are seriously considering the proposals made by Alan Pickering in his review of the occupational pension scheme. We shall respond to those reports in the autumn, and put forward our proposals.

Jim Cousins: Most public sector pension schemes are, of course, unfunded, and they are an important part of the rewards package for low-paid workers in local government, health, the fire service and the police. Is it Government policy to continue those public sector schemes on a final salary basis, including survivor benefits and indexation of the pension once it is in payment?

Ruth Kelly: I take it that my hon. Friend is referring to the Pickering review, which proposed some changes in what it is compulsory for employers to offer in their pension schemes. We are, of course, taking those proposals extremely seriously—but at first sight some of them, especially those on compulsory indexation and survivors benefits, do not seem attractive. Against that, however, must be weighed the overall impact on occupational pension schemes. We are taking the issues extremely seriously, and we will make proposals in due course.

Manufacturing Industry

Mark Simmonds: What discussions he has had with the Secretary of State for Trade and Industry regarding manufacturing industry competitiveness.

John Healey: My right hon. Friend has regular meetings with the Secretary of State for Trade and Industry on a wide range of issues, and we recognise the vital contribution that UK manufacturing makes to the economy, exports and innovation. That is one reason why the Government are now investing so heavily in innovation, with Monday's announcement of the largest sustained increase in the science budget for a decade, and the announcement in April of the extension of the R&D tax credit to all firms—a measure that will overwhelmingly benefit manufacturing industry.

Mark Simmonds: I thank the Minister for that answer, but is it not true that since 1997 UK manufacturing industry has had to suffer an explosion of red tape and bureaucracy, as well as an increase in taxation? No fundamental reform of public services was mentioned in the Chancellor's announcement on Monday, yet he was only too happy to throw the public's money around like a drunken sailor. In that context, I would like the Minister to tell us how the Government square the increase in red tape, bureaucracy and taxation on manufacturing industry with pretending to support an entrepreneurial and enterprise economy.

John Healey: I must say to the hon. Gentleman that effective regulation has important economic benefits. If it is properly framed, regulation can correct market failures, create a more level playing field for business, and put in place essential protections such as health and safety at work. This Government have a strong record in cutting red tape. As Minister with responsibility for customs, I can say that we have recently raised the threshold for VAT registration, and we are introducing a new VAT flat-rate scheme and new VAT import reliefs. Those changes were welcomed by the British Chambers of Commerce, which said:
	"We welcome the Chancellor's attempts to try to simplify the VAT system".
	Moreover, the CBI said:
	"The Chancellor has left business in no doubt that he is committed to encouraging enterprise. The tax improvements, including the red tape burden, are welcome."

Wayne David: Does my hon. Friend agree that small and medium-sized enterprises are becoming increasingly important to the well-being of the economy, and that the measures on late payments that this Government have introduced incrementally are proving of enormous benefit to SMEs?

John Healey: My hon. Friend is precisely correct. It is such simplification measures, plus tax cuts targeted precisely at small businesses, that are bringing such benefits. Of course, all businesses also benefit from the greater economic stability that we have seen since 1997, including low interest rates and inflation rates, sound public finances, and steady growth. That is the best support that Government can give to manufacturers small and large—precisely the support that they did not get in 18 years of Conservative Government.

Tim Boswell: Have not Treasury Ministers cottoned on to the fact that increased costs on business operate at the margin, and have a completely disproportionate effect on competitiveness and profitability? Does the Minister not concede that further increases in labour market regulation are extremely unlikely to buy off labour market and trade union militancy, which sank the previous Labour Government and has returned to haunt this one?

John Healey: I simply do not recognise the hon. Gentleman's description. On costs for business—particularly small business—I should remind him that, thanks to a series of tax cuts since 1997 that were reinforced in this year's Budget, and to corporation tax reforms, we have the lowest rates in the UK's history. Capital investment for small firms—permanent in the first year—has given a real boost, and research and development investment has been welcomed across the board. The Budget's tax cuts for business across the piece mean that—even after the Budget—12 other European Union countries still have higher tax burdens on business than does the UK.

Credit Union Movement

David Wright: If he will make a statement on the growth of the credit union movement in the United Kingdom.

Ruth Kelly: Credit unions have an important role to play in tackling financial exclusion and enhancing opportunity, through the provision of core financial services. That is why we are delivering a programme of strategic deregulation to enable credit unions to offer a greater range of services to their members, thereby helping them to develop and to grow.

David Wright: I thank my hon. Friend for her reply. Will she join me in congratulating and thanking the many thousands of people who give of their time voluntarily to support the credit union movement in the UK? Does she agree, however, that the term "credit union" is itself problematic, because for many people it implies getting into debt? Does she also agree that we should perhaps re-brand the sector, as has been done in Telford through the Fair Share credit union?

Ruth Kelly: I thank my hon. Friend for his question. I know that he takes a considerable interest in these matters, and I do of course congratulate the thousands of people who provide their services for free to help credit unions prosper. That is why we are undertaking a programme to make the whole credit union sector more attractive, to enable credit unions to offer a greater range of services to their members, and to offer greater protection to members by regulating the sector through the Financial Services Authority.
	As to my hon. Friend's remark about the term "credit union", I do not share his enthusiasm for changing a brand name that is fairly well recognised not just in this country, but across the world. I would therefore hesitate before recommending to the sector that it changes the name.

Martin Smyth: I join the Minister and others in congratulating the credit union movement and those who have done so much to help their own communities. I also welcome the fact that steps have been taken to strengthen the supervision of credit unions. Am I right in thinking that that has been done not to hinder the credit unions, but to protect them in an age of creative accounting, when people often misuse money? Those measures should not be shunned, but accepted and supported.

Ruth Kelly: I completely agree with the remarks made by the hon. Gentleman. It is important for the sector itself, as well as for its members, that it is appropriately and proportionately regulated. I welcome the fact that thousands of members of credit unions, as well as the organisations themselves, took the opportunity to respond to the FSA's consultation on how that regulation should be carried out. The new framework will increase the reputation and credibility of the sector and it will also offer important investor protection to credit union members, bringing them under the same sort of protection regime as bank and building society depositors.

Business of the House

Eric Forth: Will the Leader of the House please give the business for next week?

Robin Cook: It will be a pleasure. The business for next week will be as follows:
	Monday 22 July—Second Reading of the Mobile Telephones (Re-programming) Bill [Lords].
	Motions to establish the Transport and the Office of the Deputy Prime Minister Select Committees.
	Motion on the summer recess Adjournment.
	Tuesday 23 July—Debate on public expenditure on a motion for the Adjournment of the House. [Interruption.] I look forward to the contribution from the hon. Member for Buckingham (Mr. Bercow).
	Wednesday 24 July—The House may be asked to consider any Lords messages that may be received.
	Consideration in Committee and remaining stages of the Mobile Telephones (Re-programming) Bill [Lords].
	The business for the week after the summer recess will be:
	Tuesday 15 October—Motion relating to the Industrial Development Act 1982.
	Remaining stages of the Public Trustee (Liability and Fees) Bill [Lords].
	Debate on local government finance formula grant distribution on a motion for the Adjournment of the House.
	Wednesday 16 October—Opposition Day [18th Allotted Day]. There will be a debate on an Opposition motion.
	Thursday 17 October—Debate on defence in the world on a motion for the Adjournment of the House.
	Friday 18 October—The House will not be sitting.
	I would also like to inform the House that the business in Westminster Hall for October will be:
	Thursday 17 October—Debate on the report from the Transport, Local Government and the Regions Committee on road traffic speed.
	Thursday 24 October—Debate on the UN charter on the rights of the child.
	Thursday 31 October—Debate on the report from the Foreign Affairs Committee on foreign policy aspects of the war against terrorism.
	The House will also wish to know that on Tuesday 15 October, there will be a debate relating to major accident hazards involving dangerous substances in European Standing Committee A, and on Thursday 17 October 2002, there will be a debate relating to the European Union action plan on drugs in European Standing Committee B.
	Details of the relevant documents will be given in the Official Report.
	[Tuesday 15 October 2002:
	European Standing Committee A—Relevant European Union document: 15275/01, Major accident hazards involving dangerous substances. Relevant European Scrutiny Committee Reports: HC 152-xxxiv and HC 152-xix (2001–02).
	Thursday 17 October 2002:
	European Standing Committee B—Relevant European Union document: 10207/01, The EU Action Plan on drugs 2000–2004. Relevant European Union Scrutiny Committee report: HC 152-ii (2001–02).]
	As this is the last business statement before the recess, may I—

Michael Fabricant: Invite us all for drinks?

Robin Cook: Sadly, I am too constrained by my work on behalf of the House to take time off to do that. On behalf of the House, I wish to thank all the staff of the House for their hard work—[Hon. Members: "Hear, hear."] Without that hard work, we could not have sat over the past year. As Leader of the House, I also wish to record my personal thanks to the parliamentary clerks across Whitehall for their co-operation and support.

Eric Forth: I thank the Leader of the House for giving us the business. I echo strongly his thanks to all of the staff and Officers of the House who help us in our work. It should never go unrecorded or unappreciated.
	Can the Leader of the House tell us why we are having a defence statement today? Yesterday, we had a defence debate—indeed, the Minister opening that debate took some 74 minutes of the time of the House. I should have thought that it would not be beyond the wit of the Government and the Leader of the House to have put a defence statement on the same day as a defence debate. Instead, there will be three statements today. They will squeeze consideration on the Proceeds of Crime Bill, for which 13 groups of amendments have been selected. That is the very Bill whose progress the Prime Minister tried to imply that the Opposition were obstructing. It is the Government who seem to be conspiring to give that Bill less consideration than it deserves. Will the Leader of the House explain what on earth is happening, and why he seems to have lost his grip almost completely?
	Next Monday, we will get the Anderson report on foot and mouth. We know that because Anderson has told the world so. Will the Leader of the House guarantee that the House will have the opportunity to consider that very important report before we leave for the summer recess? We must not slip into the recess without being given the chance to consider the report, and perhaps we could delay the recess by a day. [Hon. Members: "You will be on your own."] I hear Labour Members say that I will be on my own, but it is clear from their response to that that my colleagues will be here. We want the opportunity to hear from a Minister about the Government's response to the Anderson report on foot and mouth. We are prepared to be here for as long as that takes.
	In connection with matters agricultural, the Leader of the House will be aware of the excellent report produced yesterday by the Select Committee on the Environment, Food and Rural Affairs on the annual report for 2002 from the Department for Environment, Food and Rural Affairs. Among other things, the Committee stated that the "achievements" section of the annual report was misnamed and that it
	"might usefully be included in future reports, but in brief, and described simply as 'how we spend our time'."
	The Committee also recommends that
	"the Report contain more hard financial data . . . and less waffle."
	That is how a Select Committee of this House, with a Labour majority, sets out what it thinks of the Department for Environment, Food and Rural Affairs. It goes on to state that
	"the level of detail currently given is not acceptable."
	It recommends that the Department
	"as a matter of urgency examine the accuracy of the data in the Departmental Report, and issue corrigenda as necessary."
	It also states:
	"Finally, some data is missing."
	I hope that the Leader of the House agrees that those studied comments by a Select Committee warrant full consideration by the House before the recess. Such matters should not be slipped away so that—as the Government hope—they might be forgotten.
	The next section of my remarks might be entitled "ministerial inaccuracies". I choose that second word carefully, as you, Mr. Speaker, would reprimand me if I used words such as porkies, whoppers or anything else. In deference to you, therefore, I shall stick to the word "inaccuracies".
	My first question refers to the point of order raised by my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), to which reference was made at last week's business questions by my hon. Friend the Member for Wycombe (Mr. Goodman). The point of order referred to the Minister for Pensions, who my colleagues believed had given the House inaccurate information on whether pensioners could elect to have a home visit from the pension service.
	That is a serious matter, as there appears to be a complete difference of view between the Minister and one of his officials. I hope that the Leader of the House will give the Minister for Pensions time to come to the House and correct the record, not least so that pensioners can be reassured that what he and the Department are saying is accurate and reliable.
	On July 15, the Chancellor of the Exchequer said of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Chancellor, that he was Home Secretary "when crime doubled." The truth is that crime fell by 18 per cent. while my right hon. and learned Friend discharged his duties as Home Secretary. Will the Leader of the House say what is the source of the Chancellor's assertion? Will the Chancellor come to the House to apologise, or will the Leader of the House now have to start excusing inaccuracies by the Chancellor as well as by the Prime Minister?
	Talking of which, yesterday in PMPs, my right hon. Friend the Leader of the Opposition quoted the Prime Minister as saying that the Government
	"would reduce levels of street crime to below the April level."
	The Prime Minister replied:
	"I shall certainly repeat exactly what I said"—
	in other words, he seemed to imply that that would be done. However, at column 281, my hon. Friend the Member for Canterbury (Mr. Brazier) asked by how much the Prime Minister
	"expects robberies to have fallen by September?"
	and the Prime Minister said that
	"instead of the trend being up, it should be down".—[Official Report, 17 July 2002; Vol. 389, c. 279-81.]
	Obviously, again, the Prime Minister chooses his words to fit the moment, with a blithe disregard for accuracy. So the question to the Leader of the House is: is the Prime Minister massaging, redefining or spinning, and how often does the Leader of the House expect to have to come to the House on a Thursday and excuse or apologise for what his colleagues have said?

Robin Cook: The right hon. Gentleman must be seriously concerned that he will miss these exchanges over the next three months, so he has given us a treble helping today. I am in generous mood, and the House is in demob mood, but as the right hon. Gentleman quoted one of the Select Committees calling for a lot less waffle, I should have thought that he might reflect on those words himself over the next three months.
	On the statement from my right hon. Friend the Secretary of State for Defence, I do not think that the House can hear too often from my right hon. Friend, who is punctilious in fulfilling his duties to this place. I am advised that in yesterday's debate we had fewer speakers from the Conservative Benches than from the Labour Benches. My right hon. Friend is no doubt keen that there should be a full attendance of Conservative Members on this occasion to hear his important statement about the future strategy for our defence forces. It is absolutely right that that should be brought before the House.
	As to any squeezing of time for the Proceeds of Crime Bill, I saw the right hon. Gentleman in his place yesterday when we both supported our senior figures. He may recall that the leader of the Conservative party assured the House that the Conservative party now supports the Proceeds of Crime Bill. It is therefore a bit rich to complain only 24 hours later that there is not enough time to debate it.
	On the forthcoming Anderson report, it is unusual to declare this in advance to the House, but in these circumstances I think it is right to do so: I have discussed the matter with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and she is keen to make a statement to the House on Monday. There will be a statement on that issue.
	The right hon. Gentleman seemed to suggest that he wanted additional time for the House to debate the matter, and that we should postpone the recess. Before we embark on the wider question of the business statement, I should warn the House that I have no plans to go abroad this summer, so there is a serious danger that if asked to detain the House longer, I might agree. I hope that my hon. Friends will take that on board before putting their questions to me.
	On the crime statistics, over the 18 years of the last Conservative Government—the right hon. Gentleman is well aware of this, as he was present throughout that period—crime did indeed double, compared with the drop of 22 per cent. since we took over in 1997. I shall be happy to provide the right hon. Gentleman with a full list of all the Conservative Home Secretaries who collectively presided over that doubling of the crime figures during the Conservative years.
	I shall draw the right hon. Gentleman's remarks to the attention of my right hon. Friend the Minister for Pensions. The right hon. Gentleman will understand that I do not wish to give an off-the-cuff response to a matter that has not previously been drawn to my attention, but I am sure that my right hon. Friend will respond perfectly adequately to him.
	On the crime figures, I remind the right hon. Gentleman and the House that street crime in the Metropolitan area has fallen by a third since last January. That is well on course for the target for September, and the Prime Minister was right to say that we are taking special measures to make sure that we bring street crime under control. I am sure that when the right hon. Gentleman next addresses the House, he will wish to congratulate the Government on their success in that initiative against street crime in the Met.
	Lastly, the right hon. Gentleman asks whether there is a massaging of figures. I am sure that there is no massaging of figures. Indeed, we have just gone out of our way to provider fuller, clearer recorded crime statistics, and we did so despite the fact that, as he knows, the effect of the change in recording was to produce a slight rise. The rise was the result of the recording rather than the reality. That provides a stark contrast to the behaviour of the Government of whom he was a member in massaging the unemployment figures so that some of the unemployment would vanish. I remind the right hon. Gentleman that, on the eve of the general election, which is the nearest that we can come, he said that half of those who disappeared from the figures represented genuine falls. Given that he said that in February 1997, it is bit rich for him now to complain about anyone on the Government Benches massaging figures.

Harry Barnes: A serious problem faces firms trying to renew their employer's liability insurance. A firm in my constituency—Moorside Mining—has ended up paying seven times more than it did just over a year ago to continue in operation. Can we discuss that insurers' ramp, which is taking place at the moment, and the possibility of a scheme being devised—perhaps through the Consolidated Fund—so that construction, mining and quarrying firms, which are particularly badly affected, can have some protection in the future; or will pressure be put on insurers so that they bring themselves into line and provide insurance cover at a reasonable rate?

Robin Cook: My hon. Friend raises a serious issue. I cannot hold out any immediate prospect of a debate of the kind that he suggests, but I shall certainly draw his remarks to the attention of the Minister for Energy and Construction, who is in charge of such matters.

Andrew Stunell: May I associate the Liberal Democrats with the words of thanks that the Leader of the House has extended to the staff, and single out those who have been responsible for our security this Session, following the events of last autumn?
	I welcome the debate on the Select Committees that will take place on Monday 22 July. May I remind the right hon. Gentleman that when the House approved the Modernisation Committee on that topic earlier this Session, the one issue that was not addressed was the political balance of Select Committee chairmanships? In considering the forthcoming reorganisation, will he undertake to use his good offices to ensure that the party political balance of the chairmanships is restored to the level that it should be?
	Last Monday, the House was presented with a Government motion to end Friday sittings in October. Presumably, that was done in expectation that the Home Energy Conservation (No. 2) Bill—the HECA Bill—will be successfully completed on Friday.

Desmond Swayne: Read the Order Paper.

Mr. Speaker: Order. Let the hon. Gentleman speak.

Andrew Stunell: Thank you, Mr. Speaker.
	In the event that the Bill, as amended, does not pass—[Interruption.]

Mr. Speaker: Order. The hon. Gentleman is putting a question to the Leader of the House. Let the Leader of the House answer the question.

Andrew Stunell: Unfortunately, Conservative Members do not appear to be aware that a substitute Bill is being submitted. My point to the Leader of the House is that, were that Bill—

Desmond Swayne: It has been withdrawn.

Mr. Speaker: Order. Mr. Swayne, please be quiet. The House is very noisy, and we have only a few days to go.

Andrew Stunell: I think that I am entitled to be wrong when I speak in the Chamber, as well as to be right. My point to the Leader of the House is whether he will reconsider his decision, as put to us, to end sittings on Fridays in October to give extra time to private Member's Bills that have not been completed before the summer break?
	Just before I entered the Chamber, I was given a detailed brief on what the Deputy Prime Minister will tell the House in the statement that he will make in a few minutes' time. I got that detailed briefing from BBC News 24. Does the right hon. Gentleman agree that it is highly unsatisfactory that hon. Members could put on to the record of the House what the Deputy Prime Minister will say in advance of his saying it on the basis of news reports, but that we cannot get that information from the Vote Office? I hope that the right hon. Gentleman will have something to say about that.
	Finally, the Leader of the House will know that I have been challenging the Government's capacity to answer parliamentary questions during this Session. Does he accept that several Departments are still massively behind in responding to questions, and that increasing evidence exists that political advisers and civil servants are working together to obstruct and prevaricate in the provision of honest and accurate replies, rather than facilitating them as the ministerial code requires?

Robin Cook: Let me say, first, that the Opposition will join me in saying that all Members of the House would support fully the democratic right of the hon. Gentleman and his party to be wrong. There is no contention from us on that issue.
	I know of the Liberal Democrats' concern that they do not hold sufficient numbers of chairmanships of Select Committees. Of course, that is not, in the first instance, a matter for me; strictly, it is a matter for the Committees to resolve. In the case of the two Committees that we shall appoint next week, there are two existing Committees in that area and two splendid Members of the House who have tended to preside over them. I could not counsel anyone to whom I have good feelings that they might intrude on that particular contested field. I am aware of the issue, however, and I shall certainly bear it in mind for a future occasion.
	On private Members' Bills, those for this Friday—if I may clear up this doubt—consist of about 40 Bills on the Order Paper, which I think will be sufficient. The first three of those are: the Private Hire Vehicles (Carriage of Guide Dogs, Etc.) Bill, which, the House will be aware, the Government support; the Commonwealth Bill, which the Government also fully support; and the Housing Benefit (Withholding of Payment) Bill, to which I understand members of the hon. Gentleman's party have tabled a very large numbers of amendments. That does not suggest to me that they anticipate that other Bills that appear further down the Order Paper will get a hearing. It is for the House on Friday to decide how it will handle these matters. I do not anticipate, however, that the Home Energy Conservation Bill will appear in either its previous reform or in a revised form on Friday.
	I understand what the hon. Gentleman says about sittings on a Friday in October. I am not sure, however, that it would be responsible to extend the time available for private Members' Bills in October, given that the Bill to which the hon. Gentleman referred will still have to go to the Lords and come back. We must be realistic about what is achievable between now and the end of the Session.
	Lastly, I would not, of course, accept in any way that Departments are conspiring to obstruct answers to Members. The hon. Gentleman will be aware that in the case of the Department for Education and Skills, Ministers have made it perfectly clear that they want the guidance reasserted to match that for civil servants so that we do not have a repetition of the e-mails that the hon. Gentleman saw.

Julia Drown: HIV/AIDS is currently claiming more than a million lives in heavily indebted poor countries, yet half the countries receiving debt relief are spending more on debt payments than on public health. Could the Leader of the House find some time for us to debate that matter to see how we can engage the international community on debt, aid and trade, to tackle this disaster, which is set to reduce life expectancy in some of those countries to the age of only 27?

Robin Cook: First, I fully concur with my hon. Friend on the very important matter to which she draws attention, which is having a severe impact on some of the poorest countries in the world. For that reason, the Government have fully supported the proposal, through the G8 and the United Nations, for a special fund to tackle the HIV/AIDS threat in those countries. That is also why Britain worked very hard to make sure that development aid for Africa, which is one of the continents worst-hit by AIDS, should be at the heart of the debate held only last month at the G8 in Canada. We secured some progress there in making sure that there were fuller commitments to help Africa.
	We have shown leadership on the relief of debt, and it is fair to say that no other major developed country has done more than we have to tackle the debt burden. We have unilaterally renounced the debt to Britain of more than 20 of the poorest countries. We shall continue to work on that—there is a lot more to be done—but Britain does not need to be ashamed of its record in this area.

Michael Jack: The last time that I asked the Leader of the House for a full-scale debate in Government time on agriculture, he counselled me that it could not be done until all the reports associated with foot and mouth disease were in the public domain. As that is about to be achieved—in addition to the publication of the mid-term review of the common agricultural policy, the Environment, Food and Rural Affairs Committee report on the activities of the Department for Environment, Food and Rural Affairs, and the fundamental spending review report on the future budget for DEFRA—will the Leader of the House ensure that as soon as we come back after the summer recess, if not before, we have a full-scale debate on agriculture? All the criteria that he laid down for such a debate have now been fulfilled.

Robin Cook: It will not be possible to do that before the House rises for the summer recess. However, I am well aware of the issue and will bear it in mind when we return.

Gordon Prentice: The Minister for Rural Affairs will conduct public inquiries in September in connection with the latest leg of the saga on hunting with dogs. He has given the same amount of time to those who argue for a ban as he has to those who wish to retain the status quo. Inexplicably, he has given the same amount of time to those who argue for the middle way, which has no discernible support in the House or outside. I urge my right hon. Friend to pass on my concerns to the Minister. Will he ask him to make an early statement when we return in October on precisely where we are on that issue, which concerns many of us?

Robin Cook: The precise arrangements for consultation are for my right hon. Friend the Minister for Rural Affairs to determine. I am sure he will want to make proper arrangements so that he hears the full spread of views. As someone who has consistently supported the middle way both times, I can only say to my hon. Friend that I think that I am discernible.

Michael Trend: The Leader of the House will be familiar with the fourth report of the Science and Technology Committee on developments in human genetics and embryology, which is an important and difficult matter. Can he reassure us that ownership of that important subject still resides with the House? Will he give us an early debate on the important matters raised in the report, especially the question of the Human Fertilisation and Embryology Authority's decision to allow tissue typing in conjunction with pre-implantation genetic diagnosis?

Robin Cook: The hon. Gentleman is right. Such matters can always be brought before Parliament, and the Select Committee's report reasserted the importance of Parliament's view. We have not legislated on that subject for some years, and I heard a spokesman this morning from the Human Fertilisation and Embryology Authority say that there are ways in which the authority might also welcome the law being looked at. However, it is important to recognise that we established the authority because individual decisions of that nature should not be made by politicians on political lines—

Bob Spink: That was not an individual decision. That particular decision was ground breaking.

Robin Cook: If I may answer the question in my own way, it might be helpful to the House.
	I do not think that the House should get involved in second guessing any individual case. On the particular case in question, I disagree with the hon. Member for Castle Point (Bob Spink). The spokesman for the Human Fertilisation and Embryology Authority made it clear this morning that it took a decision on that case simply to ensure that the next child was healthy. That is nothing new.

Julie Morgan: Is my right hon. Friend aware of the report issued by the Joint Committee on House of Lords Reform yesterday, which says that it will conclude the first part of its work by the autumn and is planning to meet twice in September? Will he endeavour to allow us to vote on the report at the earliest opportunity, possibly in the spill-over Session before the Queen's Speech?

Robin Cook: I very much welcome the report. It shows that the Joint Committee is going about its work in a brisk and business-like way. I welcome the fact that it will meet during the recess. It has already agreed that there should be two phases to its work: first, to report to the House on the list of options on composition and, secondly, to consider in more detail how it will craft a second Chamber around whatever decision is taken by both Houses. I stand ready to arrange for the first of those to be put before the House, but I need to receive it from the Joint Committee before I can do so.

Patrick Cormack: The Leader of the House said that he hoped that the Modernisation Committee's latest report would be with us before we rose so that we could study it in the recess and debate it when we return. Is that still his hope and expectation? When does he expect this Session to end and the new Session to be opened?

Robin Cook: I expect the Modernisation Committee to sit next Wednesday morning under my chairmanship to discuss the Chairman's draft, which I hope we will be able to adopt.

Eric Forth: Oh no.

Robin Cook: I regret to disappoint the right hon. Gentleman, but it is quite possible that we will adopt it. However, I cannot commit all members of the Committee to that, and I need their co-operation to secure that outcome.

Eric Forth: Ah!

Robin Cook: I do not think that I am giving away any secrets of procedure within the Select Committee. The draft is the property of the Select Committee once I lay it before it. I have a lively expectation that we may reach a conclusion next Wednesday, in which case the hon. Member for South Staffordshire (Sir Patrick Cormack) will have some useful, viable and uplifting reading over the summer recess.

Jonathan R Shaw: Is my right hon. Friend aware that yesterday the Director-General of the BBC appeared before a Committee of the House and denied vehemently that there are any plans to dumb down political coverage? Yet only hours later we saw Mr. Jeremy Paxman asking questions of the leader of the Liberal Democrats that were highly personal and completely irrelevant to political debate. This is an issue for all of us who are involved in politics, whether covering politics or involved in policy making. Are there to be no limits to questions from interviewers? Does my right hon. Friend agree that that will do nothing to enhance the institutions of Parliament or the BBC?

Robin Cook: My hon. Friend raises a serious issue. Irrespective of political party, many Members must have been taken aback and distressed by the degree of personal questioning that took place yesterday. It does not matter how frank and open the replies Members give in these circumstances are—we all know that in such circumstances, when mud is thrown, there is a tendency for it to stick, and it is difficult to dispose of it.
	The BBC needs to reflect on the fact that it is a public service broadcaster. As a result, it uniquely receives a licence fee that is paid by all viewers within the United Kingdom. One of the conditions of retaining that privileged status is that it should not seek to dumb down and compete with the bottom end of the market.

Simon Burns: Will the Leader of the House arrange next week for a Minister from the Department of Health to make a statement in the light of the crisis in care homes, especially in the Birmingham area, which is causing grave concern to many, including my hon. Friends the Members for Sutton Coldfield (Mr. Mitchell) and for Bromsgrove (Miss Kirkbride)? Is the right hon. Gentleman aware that as a result of the Department with responsibility for social services spending 100 per cent. less on fees to private homes compared with its own homes, over the past 18 months it has forced more than 80 homes to close, with terrible problems for the most vulnerable and frail in our society?

Robin Cook: I repeat what I have said in the House on a number of previous occasions. The Government have provided for a 20 per cent. increase in real terms for social service spending by local authorities. That compares with an increase in the last five years of the previous, Conservative Government of 0.1 per cent. Moreover, the House has just heard my right hon. Friend the Chancellor announce a comprehensive spending review, which provides for a similar increase over the lifetime of the next spending review. It is for local authorities to make their own judgments on priorities in their areas and how best to achieve them. It is not a matter for the Government to instruct local authorities and to try to second-guess how they use resources. There are now far more resources—far more than were ever dreamed of by the Conservative Government.

Judy Mallaber: Yesterday, thousands of local government employees, many of them low-paid women workers, were involved in action over their pay. Even if there is no time to debate the issue before the recess, will my right hon. Friend ask his ministerial colleagues to consider whether there is any further action that they can take to encourage an early resolution of the dispute through negotiations or the use of the conciliation and arbitration procedures?

Robin Cook: The House will be aware of the dispute to which my hon. Friend refers. It is a matter for the local authority associations and their staff to resolve it. The offer that is on the table provides for a 3 per cent. increase. That fully matches the average settlement at present within the private sector. Over the past five years, settlements involving local government staff have more than kept pace with inflation.
	I understand entirely the point that my hon. Friend makes about lower paid members of the local government sector. They are very much a matter of priority for the Government. That is why, through working families tax credit and through the other tax credits that we have provided, we have tried to make sure that we target and help those who are low paid. That means, for instance, that a school caretaker on £170 a week is now £56 better off than he or she was at the time of the 1997 general election. We shall continue to do all that we can to ensure that the low paid are assisted and get priority. I hope that the unions and employers, too, will find a settlement that does the same.

Archy Kirkwood: May I draw the attention of the Leader of the House to the recently published annual report of the president of appeal tribunals on the standard of decisions taken in the name of the Secretary of State for Work and Pensions? For the second year running, he adverted to real problems in relation to the way in which medical evidence is collected, assessed and used by decision makers in reaching disability living allowance awards. The Department's own figures suggest that one in five cases is being under-awarded. Will there be an opportunity for the House to discuss that important matter?

Robin Cook: The hon. Gentleman raises an important issue. Many of us will have seen in our constituencies cases involving medical appeals where we might have come to a different judgment. The hon. Gentleman is well placed to ensure that such matters are processed, and no doubt his Select Committee will examine the matter and follow his lead.

Tony McWalter: Will my right hon. Friend reflect on the bizarre fact that after a Budget we have five days of full debate, but after a most welcome—but most complicated—comprehensive spending review, we have had no time at all for an extended debate? I say that because there were some omissions from the review. I am particularly concerned about the lack of any proper debate on provision for universities, some of which are facing such a funding crisis that, among other things, medical schools and faculties may close before Parliament reconvenes. Will my right hon. Friend request that the relevant Minister come to the House before the recess to discuss the apparent absence of commitment to our universities and their funding future?

Robin Cook: I would not accept that there is an absence of commitment to universities. Indeed, we are proud of the fact that we now have entry rates that are among the highest of any of the OECD countries, as well as one of the highest rates of completion of higher education, and we want to build on that success.
	I remind my hon. Friend that we heard a very full comprehensive spending review statement on Monday. It was well received inside and outside this Chamber and by many of those working in the public services, including in education. Since then, there have been two or three other statements in the House on how the money is to be spent by Departments, and hon. Members will have an opportunity fully to debate the matter next Tuesday. The totality of that record does not suggest that we are either seeking to deny the House the opportunity to explore the issues or saying anything that has not been well received here and elsewhere.

Bob Spink: The right hon. Gentleman showed an uncharacteristic lack of knowledge in answering the question asked by my hon. Friend the Member for Windsor (Mr. Trend). He said that the decision taken on the Hashmi case was not a ground-breaking decision, but simply another in a string of decisions. That is not the case. It was a ground-breaking decision, as was acknowledged by the health editor of BBC Online this morning. Is it not time that the Human Fertilisation and Embryology Act 1990 was brought back before the House to be debated, so that we can make decisions on matters of such fundamental importance as the creation of new human life for a pre-designed purpose?

Robin Cook: I gently say to the hon. Gentleman that my election by my constituents and my democratic mandate entitle me, just occasionally, to disagree with the BBC, and I may indeed do so again. [Hon. Members: "Hear, hear."] I am grateful for that encouragement. On the BBC this morning, I heard the spokesman for the Human Fertilisation and Embryology Authority herself say that the decision in that case was taken perfectly in line with many previous decisions to ensure that the child was born healthy.
	I repeat what I said earlier: I deprecate our debating in this Chamber the circumstances of one particular case. It is not our business, nor should it be decided along political lines.

Paul Flynn: I ask my right hon. Friend for a debate on early-day motion 1637.
	[That this House welcomes the intention of film producer Steven Spielberg to create a television series recreating the life and battles of King Arthur, including British actors in the production; notes the success of the series 'Band of Brothers' filmed in England; recognises the historical and mythological connections of King Arthur with Somerset, the identification of Camelot with Cadbury Castle and of the Isle of Avalon with Glastonbury; believes the beautiful and unspoilt countryside of Somerset would therefore be an ideal location for filming such a series; and calls on the Department of Culture Media and Sport to do everything possible to attract the production to Britain and to support the rural economy.]
	That contains the dastardly and preposterous suggestion that the court of King Arthur was located at a site other than Caerleon in the city of Newport. A thousand years ago, the Mabinogion and the writings of Geoffrey of Monmouth identified Caerleon as Camelot. That was confirmed by Tennyson, who wrote his Arthurian poems in Caerleon, and by the Loyal Knights of the Round Table, who funded the excavation of the round table in the village in 1928.
	Now that Steven Spielberg is thinking of making a film about Arthur, is it not wrong and opportunist of certain other areas to claim that their towns were the site of Arthur's round table? Can we have a debate on the matter? Not only might the claim threaten an opportunity for further jobs and prosperity in the beautiful town of Newport, but it is a terrible attempt to steal part of Welsh history.

Robin Cook: Of course, many Scots scholars maintain that Arthur was a prince of Strathclyde, and the legends recount the way in which he defeated the Angles of Northumbria. I therefore conclude that the whole of Britain has a good claim to sharing in Arthur's legend, exploits and success.

Roy Beggs: Does the Leader of the House accept that, after Tuesday's partial apology from the IRA, it is more important than ever for the Government to present their promised statement on Northern Ireland before the summer recess? Does he agree that it must spell out the full implications of the Prime Minister's statement at Hillsborough about the breaches in the IRA's ceasefire? The Prime Minister said that the Government would
	"lay down the clear principles that we abide by, and what happens if people don't abide by them."
	Does the Leader of the House agree that the time has come for the Government to impose sanctions on Sinn Fein-IRA and others who fail to abide by those principles?

Robin Cook: As the hon. Gentleman knows, my right hon. Friend the Secretary of State for Northern Ireland welcomed the apology; it is a useful contribution to the peace process. However, the hon. Gentleman is right that the apology is valuable only if it helps us to make progress with the peace process. The test of the apology is whether we make the progress that is necessary to secure a permanent and just settlement in Northern Ireland. That is the Government's objective.
	A statement will be made before the House rises for the recess and the hon. Gentleman can put his points to the Secretary of State then.

John Smith: I acknowledge the leading role that the Government play in supporting international research into air travel and deep vein thrombosis. Will my right hon. Friend undertake to ensure that, throughout the summer, his colleagues in the Department for Transport and in the Department of Health continue to maintain pressure on other Governments to play an equally responsible role in funding the World Health Organisation's essential research?
	I note that my right hon. Friend is not flying away on holiday this summer. However, all hon. Members will receive a free copy of the fitness-to-fly self-assessment guide before the House rises next week.

Robin Cook: I am sure that all hon. Members will be grateful for any addition to their holiday reading. I am glad that my hon. Friend has had an opportunity to repeat his point in the last business statement before the recess. He has been one of our most regular contributors and I congratulate him on the tenacity and diligence with which he has pursued a serious issue. We are trying to make progress on the matter, and I believe that our Government have made a useful contribution to the international debate on it.

Cheryl Gillan: Notwithstanding the amusing exchanges between the Leader of the House and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), some important issues arise from the conduct of the business yesterday and today. Less than 16 hours after a major debate on a subject, a Secretary of State is coming to the House to make a major statement on it. That cannot help hon. Members to debate in a well informed fashion.
	More importantly, we will consider the Proceeds of Crime Bill later, and there is no doubt that our time is being squeezed. Whatever the Leader of the House thinks of the measure, it is not perfect and it needs fine tuning. Could we table a manuscript amendment to the programme motion so that we can sit longer to ensure that all hon. Members scrutinise the Bill fully?

Robin Cook: Although the right hon. Member for Bromley and Chislehurst (Mr. Forth) and I seek to be as interesting as we are when we make our points, there is always a profoundly serious purpose in our exchanges. I do not think that the House can reasonably criticise my right hon. Friend the Secretary of State for Defence. I think it very important that the House should hear as often as possible and at every opportunity about any developments in our armed forces. We had a debate yesterday, we will hear a statement today and we will certainly have a further debate when the House reconvenes after the recess—an announcement that I have just made. I do not see any reason why my right hon. Friend should be criticised for coming to the House separately to make a clear statement on a new strategy for the defence forces.
	I note that the hon. Lady says that the Proceeds of Crime Bill is not perfect. I did not detect that view from the Leader of the Opposition yesterday, when he expressed the Conservative party's strong support for the Bill. With that good will and support, I am sure that we can make good progress today.

Roger Casale: My right hon. Friend will be aware of the excellent debate that took place on Tuesday night at the inaugural sitting of the Standing Committee on the Future of Europe Convention. In his work as Chairman of the Modernisation Committee, I know that he will continue to monitor the important and innovative work of that Committee, which is open to all Members of this House as well as to Members of the other place. In doing so, will he give particular attention to the recommendation made in the report of the European Scrutiny Committee on scrutiny in the House of Commons that there should be a European Grand Committee, of which the Standing Committee on the Future of Europe Convention could be the forerunner? There are very many European issues that do not currently have the platform or profile that they need in this place if we are to bring European decision making closer to the citizen.

Robin Cook: We are, of course, considering the very thoughtful and far-reaching report of the European Scrutiny Committee, and we will return to the matter in the autumn when we issue the Government's response. I am not sure that I am immediately attracted to the idea of establishing another Committee in this area as a way of resolving the issue. As I have told the House before, I think that it is important that Europe should form a part of the work of all the departmental Select Committees, to ensure that they have mainstreamed the European dimension. However, I welcome what my hon. Friend said about the extraordinary Committee that we have set up to hear reports from our delegates to the future of Europe convention. The Committee is an innovation, and it hears from the Back Benchers who report to it and not from Ministers. I believe moreover that it is a useful innovation that is right for the current circumstances.

John Redwood: Can we have an early debate on the Government's ideas about changing the way in which money is distributed to local authorities? It appears that they are currently considering three proposals that will result in substantial reductions in the amount going to councils such as the Wokingham unitary authority. We find that very difficult to reconcile with their statements about there being more money for schools and social care. Can we have a proper debate about what the Government are proposing, so my right hon. and hon. Friends and I can have the opportunity to represent our councils and constituencies, which may suffer a lot as a result of the proposals? We are quite happy to stay on for another couple of days to finish the job.

Robin Cook: I am not entirely sure that the right hon. Gentleman understood what I said in announcing the business for the week after the recess, as I announced that that issue would be a matter for debate on the very first day when we return to the House. In the meantime, I remind him that the Government have published options. We have expressed no preference as regards those options, which are out for consultation; and as a result of the representation that I received last Thursday, the House will have a full opportunity to debate them as soon as we return. I would have thought that that would be welcome to the House.

Kevin Brennan: Further to the question asked by my hon. Friend the Member for Cardiff, North (Julie Morgan), will the Leader of the House explain exactly when in parliamentary terms autumn ends and winter begins? Yesterday's report of the Joint Committee on House of Lords reform stated that the first stage of the Committee's work would be completed in the autumn. When exactly is that? Given that Tennyson was quoted earlier, does he think that when the Committee issues its report, we will be seeing mists or mellow fruitfulness?

Hon. Members: Keats.

Robin Cook: I cannot hope to match the literary flair with which my hon. Friend asks his question. [Hon. Members: "He's wrong!"] I can only hope that we manage to get some summer and autumn between spring and winter, although the matter appears in doubt at the present time.

Michael Weir: The Leader of the House will be aware that in previous debates on the future of the Post Office, we have been assured that the universal service obligation is sacrosanct. He will also be aware that Consignia is currently trialling a scheme that may lead to small businesses being charged extra for the delivery of their mail before 9 am. Does he not agree that that appears to be a breach of the universal service obligation and the universal tariff, and will he ensure that the House has a debate on this important and disturbing development as soon as possible?

Robin Cook: The universal service obligation certainly stands as a cornerstone of our relationships with Consignia and the Royal Mail, and indeed there is no suggestion that there will be a withdrawal of a universal service obligation to make a delivery to every premise six days a week. The pilot studies that have been proposed will affect only those premises that receive fewer than 15 letters a day, if I recall rightly. Those premises will get a delivery every day, although getting it before 9 o'clock may, in the pilots, be as a result of an additional charge. But these are pilots; there has been no universal decision yet for the country as a whole, and I am pleased that the Royal Mail appears to be reflecting on those pilots in the light of discussions.

Andrew Mitchell: As the Leader of the House has confessed to being in a generous mood today, may I draw his attention to early-day motion 1408?
	[That this House calls on the Government to strengthen its precautionary approach to the siting of mobile phone masts by introducing a moratorium on sites on or near to schools and by re-drafting PPG8 to make it clear that planning authorities can reject applications on the grounds of local public health concerns.]
	The motion has been signed by 90 Members on both sides of the House. I signed it this week in the light of events that have taken place in Boldmere and in Wishaw in my constituency, which are causing great concern. Will the Leader of the House consider whether PPG8 should now be redrafted to ensure a better balance between the necessary commercial priorities of mobile phone companies and the rights of those affected by their decisions?

Robin Cook: The hon. Gentleman will be aware that the Stewart report found no evidence, on balance, of any general health risk, and that exposure levels were well below any risk level. As he rightly says, we have provided guidance on how planning authorities should proceed in these circumstances, but we are confident that no risk to public health has been demonstrated. If it had been, the planning system would not necessarily be the best way to address the problem. I am, indeed, in a generous mood, but I fear that my generosity has its limits.

Sustainable Communities, Housing and Planning

John Prescott: Mr. Speaker, I wish to make a statement on the Government's plans for a step change in our policies for building successful, thriving communities. The Chancellor has been generous. He has given a good settlement for local authorities, regional development agencies, regeneration, housing and planning. Today, I want to talk about two elements—housing and planning—of our settlement to provide decent, affordable homes for people wherever they live, and I want the House to join together to make a step change in our approach.
	Anyone looking at the record over the past decades will recognise that all Governments have failed to meet the housing needs of our people. There has been a continuing decline in the provision of all houses, social and private. We in the House should recognise that we have failed to meet the needs of this generation, let alone those of our children. The situation will get worse unless we take radical action now.
	In the past 30 years, we have seen unprecedented economic growth, rising incomes, smaller households, and people living longer. We have seen an increasing demand for housing, but overall, we are building 150,000 fewer homes today than we were 30 years ago. It is no wonder that house prices are rocketing, and no wonder that many people cannot afford to live where they were born, in both urban and rural areas.
	There are different problems in different places. We are failing to adjust to geographic changes in economic activity, failing to tackle abandonment and dereliction, and failing to provide homes for teachers, nurses and other key workers. We are placing our public services under pressure because they cannot get enough skilled staff. So today, I am announcing a step change in housing policy. I propose to do that by promoting sustainable communities, making the best use of our land, increasing development on brownfield sites and protecting and enhancing our green belt and valuable countryside.
	The shortage of housing in London and the south-east is causing record housing costs, which are impacting directly on living standards. They are making it more expensive for companies and public services to recruit and retain staff, and more difficult for young people to get a foot on the housing ladder. They are also affecting our public services and forcing more families into bed-and-breakfast accommodation.
	Two years ago, in regional planning guidance 9, I put in place a "plan, monitor and manage" approach to planning for additional housing in the south-east. I said then that local authorities should provide for new homes at the rate of 23,000 a year in London and 39,000 a year in the wider south-east. Today we have to be open and honest, and recognise that those targets are simply not being met. We estimate that, over the last two years, the shortfall was approximately 10,000 homes, which has contributed to our problems. We can no longer allow this to continue. I am therefore announcing today a number of measures that will meet the real pressures and challenges that we face.
	First, I will insist that all local authorities deliver the housing numbers set out in regional planning guidance. Tackling housing shortage is a national responsibility and we must all play our part—centrally and in local government alike. I am therefore putting local authorities on notice that, where they fail to meet their targets, I will take action to intervene.
	Secondly, I will accelerate the existing proposals for significant growth in the four growth areas identified in regional planning guidance for the south-east. Two years ago, I asked for reports to be prepared on the potential growth in the Thames gateway, Ashford, the Milton Keynes area and the London-Stansted-Cambridge area. Those studies are complete or nearing completion, and they show how economic development will increase the number of homes we need.
	Over the coming months, taking account of those studies, I will work with regional and local partners in each of the four areas to establish where, at what scale and how quickly that growth can be achieved. Overall, we estimate that at least 200,000 new homes can be created in those growth areas. In the Thames gateway in particular, I will be putting a renewed emphasis on delivery and, in discussion with the Thames Gateway Partnership, I will establish new means of delivering rapid regeneration.
	Thirdly, we need to make better use of land by improving design, increasing densities and using brownfield sites to the full. In 1998, I committed the Government to a target that 60 per cent. of new homes should be on brownfield land. I am happy to report that the target has been achieved eight years earlier than predicted, but we need to keep up the pressure.
	To help with that, I will establish a register of surplus brownfield land held by the Government and public bodies. I am instructing English Partnerships to use its new role on brown fields to search out and to deliver even more land for housing. I can also announce that we will be proceeding with a further three millennium communities in east Ketley, Milton Keynes and Hastings. That will add to the four we have already agreed in east Manchester, Allerton Bywater, Greenwich and King's Lynn, bringing the number of communities to seven and the homes that will be delivered to more than 6,000.
	To produce more sustainable development, however, we must use land more efficiently to reduce the overall land take. To do that, I am announcing that I intend to intervene in planning applications for housing that involve a density of less than 30 dwellings per hectare. I am also setting a new target to protect valuable countryside. Since 1997, I have increased the green belt by 30,000 hectares. Today, I can announce for the first time a public service agreement target committing us to protecting the valuable countryside around our towns and our cities, and in the green belt.
	We will not tolerate urban sprawl and we will not concrete over the south-east, as some have speculated in the press, or any other region, but housing pressures in London and the south-east are acute and they require ambitious solutions. My strategy of providing for sustainable, high-quality, well planned communities in the growth areas will benefit everyone. It will mean that we reduce the pressures elsewhere in the south-east and it will protect valuable countryside for the benefit and enjoyment of all.
	There is a need not just for more homes, but for more homes that people can afford. We have said, "Schools and hospitals first." That means special attention for helping nurses, teachers and other public service workers to get affordable homes. Since 1997, the Government have almost doubled the funding for affordable housing, to £1.2 billion a year, and this is now supporting the creation of 20,000 new affordable homes every year.
	Subject to further detailed consideration of how best to use the new money available, we will now be able to increase the funding to provide additional homes for key workers and new social housing for the homeless and families in bed-and-breakfast accommodation. In addition to that new funding, we will be looking for ways to extend our existing programmes for affordable housing through a greater partnership with employers and public and private landlords.
	The problems in the north and the midlands are different, but just as pressing. Some of our towns and cities are experiencing a renaissance in their economic and cultural fortunes, but many also have communities where properties are almost worthless, leaving people trapped in negative equity and facing the problems associated with social exclusion. We are building the wrong kind of houses in the wrong places and failing to tackle fully the urban decay associated with that.
	Earlier this year we announced the creation of nine Pathfinder projects in the north to tackle the most acute problems of low demand and abandonment in the north and the midlands. Those projects will help to tackle the blight afflicting properties in the Pathfinder areas. Following European Union approval, we will go ahead with our new housing gap-funding scheme, which will allow support for housing programmes where the market price is less than the cost of development.
	We will also reinforce our efforts to improve the overall condition of housing, and to ensure that everyone has the opportunity of a decent home. In 1997, we released £5 billion of capital receipts to target the backlog of repairs to council homes. Over the last five years we have trebled council funding for housing to £2.4 billion a year, and in 2000 we set ourselves the challenging target of making all social housing decent by 2010. Those actions have allowed us to make good progress on housing conditions.
	Overall, 1.7 million improvements have been made to council homes, and we are well on track to meet our interim target of bringing a third of the worst social housing—550,000 homes—up to a decent standard by 2004. We will work towards that target by devoting even more resources to refurbishment, by allowing all local authority arm's-length housing companies to apply for additional funding, and by reviewing all policies that contribute to our 2010 decent homes target to ensure that they are as effective as possible and provide value for money.
	Not just social housing needs attention. People in the private sector suffer some of our worst housing conditions. All too often, housing benefit funds the provision of unfit housing, to the detriment of the tenant and the benefit of the landlord. That is unacceptable. As soon as parliamentary time allows, we will legislate to tackle the minority of unscrupulous landlords and boost our drive against poor conditions. Over the last five years we have given local authorities funds to help improve 30,000 private homes a year. I can announce today that we are setting a new objective to help improve more non-decent private-sector homes occupied by vulnerable households.
	We are investing large sums in improving all housing, so we must have an inspection regime that drives up standards across the board and ensures reform. I can now announce that I will establish a single housing inspectorate, building on the excellent work of the Audit Commission and the Housing Corporation. I can also announce that we will establish strong regional bodies, going with the grain of our proposals for regional governance. Those bodies will bring housing investment together in a single regional pot, and will link that investment with planning, infrastructure and economic growth strategies. I will announce further details later in the year when I have discussed them with key stakeholders, and I will establish the new arrangements as soon as possible.
	To achieve a step change, we need to increase resources for the planning system and bring about much-needed reform. We are therefore providing an extra £350 million for the planning system over the next three years. That money must be targeted where it will improve performance the most—and I give notice that if poor performance does not improve, I will intervene.
	The extra money will be linked to reform. Today I am publishing three documents: our response to the recent planning Green Paper consultation and supporting papers on compulsory purchase and on our regional and local plans. Copies are available in the Library.
	The documents contain extensive reforms. Let me summarise some of the key points. First, we will give counties a new statutory role in underpinning the new regional planning system, but we will abolish the county structure plans themselves. Secondly, we will introduce business planning zones to deliver growth, jobs and productivity without sacrificing quality of development. Thirdly, I will speed up the planning of major infrastructure projects by setting out the Government's objectives in clear policy statements, and changing inquiry processes to make them more efficient. I have accepted the Select Committee's argument that the parliamentary procedures for major infrastructure projects are not the best way forward. Finally, I will not change the right for objectors to make their case to the inspector at inquiries into plans but I will take action to speed up the inquiry process.
	The proposals that I have announced today focus on creating sustainable communities that will meet the needs of all, regardless of where they live or the size of their pocket, but they are just the start. I will return to the House by the end of the year with a comprehensive long-term programme of action. That will meet the different needs of both the north and the south. Whether it is key workers in need of affordable accommodation or families trapped by negative equity, we must work together to find solutions to those problems.
	Our long-term programme will link policies on housing, planning, transport, education, health and regeneration—essential for the sustainability of our communities. It will demand a new standard in how we build houses and communities, seeking improvements in density, design, environmental standards and, yes, construction techniques. It will protect and help to revitalise the countryside both for those who live in it and for those who seek their leisure there.
	This is a strategy for the long term. We know the problems. We have the commitment. We have the resources to make that start. We must recognise in the country and on both sides of this House that we have not done enough over the years. We need more homes where people want to live, near where they work, in the north and in the south, at a price that people can afford and in a way that protects our countryside.
	This is a challenge to us all, but I believe that the strategy that I have put to the House today will begin to rise to that challenge.

Eric Pickles: I thank the Deputy Prime Minister for early sight of the statement on what the Government may at some future time do with regard to housing policy. I suppose that in this Jubilee year it is natural for us to look back as well as forward, and I think that there is more than a touch of nostalgia in the Deputy Prime Minister's statement. He is known throughout the House as a deeply sentimental man, much given to romantic gestures. Conservative Members certainly appreciate the gesture of the statement as we rapidly approach the 50th anniversary of the death of Joseph Stalin. There can be no greater tribute to central planning than this housing statement.
	Just as the great generalissimo felt frustration over tractor production figures in the Urals, so the present Government will feel frustration over this half- thought-through attempt to solve the country's housing problems. Make no mistake, the crisis is entirely of the Government's own making. Who else but this Government, who presided over the worst housing figures since 1924—the year that Ramsay MacDonald was Prime Minister—could make a virtue out of reversing their own mistakes? This great leap forward is to achieve the same housing building figures that were achieved under Thatcherism. Perhaps the Prime Minister is right—perhaps we are all Thatcherites now. [Interruption.] Well, I certainly am.
	Does the Deputy Prime Minister recall saying in April 1999:
	"the green belt is a Labour achievement, and we mean to build on it"?
	Is this what he meant: concreting over the green belt of Kent and Essex, destroying the character of those counties?
	In his statement, the Deputy Prime Minister made great play of increasing the amount of green belt. Indeed, he took some credit himself, but it has to be said that not one single acre of green belt was added to either Kent or Essex. He also says that, eight years ahead of schedule, 60 per cent. of developments are on brownfield sites. That is a direct result of the poor housing figures. Frankly, 60 per cent. of not very much is still not very much. There are no significant brownfield sites in Uttlesford.
	The submissions to the Chancellor were made when transport was the responsibility of the right hon. Gentleman's Department, yet there are some deep contradictions in them. Doctors, teachers and nurses need to work in London and the south-east, and no new rail links have been announced. People living in the new houses in the new conurbations will face long, uncomfortable and expensive commuter journeys. Doctors, nurses and teachers want to be part of established communities. What estimate does the Deputy Prime Minister have of the average time that it will take the occupants of the new homes to travel to work?
	The statement did not address the problem of the flight from our inner cities, and the Deputy Prime Minister's suggestion that he will intervene rings rather hollow, because he shilly-shallied over the development at the Elephant and Castle. If the Government had shown some backbone over that, many of those new houses would already have been built in Southwark.
	People are fleeing the city because of the quality of life—[Interruption.]

Mr. Speaker: Order. Please let the hon. Gentleman be heard; that is only courtesy.

Eric Pickles: rose—[Interruption.]

Mr. Speaker: Order.

Eric Pickles: I am most grateful for your protection, Mr. Speaker.
	A violent crime occurs every 20 seconds in the city. People also leave the city because of overstretched health facilities and poor schools that teachers would not—to coin a phrase—touch with a bargepole. Has the Deputy Prime Minister explained his plans to the Secretary of State for Education, because there was nothing in her statement last Tuesday to suggest any match-up or joined-up government?
	What percentage of people in the new rural communities will travel to work by bus, by rail and by car, and what additional capacity is being built into public transport to allow for the new homes? What estimate does the right hon. Gentleman have of the increase in road congestion? Will he confirm that at the last count there were 193,000 empty properties in London and the south-east? Has that figure gone up or down in the past year, and what is he going to do about it?
	There is a second contradiction at the heart of the proposal. Last week the Government announced that they will take £100 million in Government grant away from Kent and Essex, yet at the same time obligations to provide new schools, extra social services and doctors' surgeries will be imposed on those counties.
	Has the Deputy Prime Minister had the chance to have a word with people who know about the planning problems in that part of the world? Has he spoken to the water companies, and is he aware that there is an acute water shortage in both Kent and Essex? He has not mentioned any provision for supplying drainage or sewerage for the new homes.
	The right hon. Gentleman needs to address the disparity in costs for developing brownfield sites. Until he does, greenfield sites will always provide the quickest solution. Kent currently has a land bank to meet its housing needs for 11 years, but much of it consists of brownfield sites and contaminated land. Helping counties such as Kent to bring those sites back into use would be a much better way to spend public money.
	The simple and hard truth is that there is nothing particularly expensive about building property in the south-east. Building and fees are not expensive, but land acquisition is—and the right hon. Gentleman's proposals will simply make land in the south-east more expensive.
	The idea of business planning zones was heavily savaged by the Select Committee. Whether its criticisms were right or not, there is still a fundamental problem with the idea. Will not areas close to the zones be at risk? Will it not be a case of chase the job around the region? A new set of multiplex cinemas or a do-it-yourself outlet will not revitalise an area. That idea smacks of 1980s solutions—[Interruption.] The 1980s were 20 years ago, and local authorities are in a different position now. They are much more able to work together than they were 20 years ago.
	We of course welcome the U-turn, following the Select Committee's criticisms, on the suggestion that this House impose a pattern. However, if the Deputy Prime Minister allowed those who want new runways in the south-east to draft the recent proposals, he should not be surprised that they were both unpopular and workable.
	I believe that the Deputy Prime Minister will regret the decision on country structure plans, which have been worked on hard for a number of years. He set up the Crow report, and many of the working parties are waiting to report on their findings. It would be a grave mistake to ride roughshod over local communities and local democracy.
	Five years ago, the Deputy Prime Minister ordered the building of 10,000 houses on the green belt near Stevenage. Now, he has returned to type—to the policy of the bulldozer. The charge that is laid against this Government is that throwing money at the problem will not work without reform. However, he has gone one step beyond: money is being thrown at the problem without reform or thought, and it will not work.

John Prescott: It would be so easy to enter into a diatribe between the political parties on what has been achieved. I did ask the hon. Gentleman to consider the fact that housing figures have fallen under all Governments, and although I will accept some responsibility on behalf of this Government, I should point out that we have not been in power for all of the last 30 years. We took over from a Government whose housing policy had led to the repossession of some half a million homes, and a £19 billion council home repair backlog that we are trying to deal with. More than 1 million households suffered from negative equity, and the mortgage rate was 15 per cent. I do not want to get into that dialogue, but that was the result of 18 years of Conservative Government.
	I entreat the hon. Gentleman to come to an agreement, because those in bed-and-breakfast accommodation who want a home, and who see the tremendous increase in house prices, want this House to be serious about the matter. They want us to end the political diatribe and to begin providing the homes that people need as an essential part of a good, decent life. I could enter into the Stalinist argument, but I was under the impression that the Tories, too, used regional planning guidance and advice in various areas. Is not the county structure plan an example of Stalinist thinking? I understand why the hon. Gentleman has to use such phrases, but will he recognise that the scale of the problem is such that this House should unite and say that we are going to do something different?
	I invite the hon. Gentleman to join me in that step change—in making a difference. That means changing planning and the rules on house building, and putting the resources where they are needed to meet particular problems. That is a challenge for us all, and it is clear that the first step change needed is in this House, so that we can get together to bring about those programmes.
	It is a bit of a cheek for the hon. Gentleman to talk about the green belt. I was the Secretary of State responsible for increasing the greenbelt by 30,000 hectares, but it was the previous Administration who reduced it. Those who recall the relevant debates in this House will know that the Opposition could not make up their mind whether the target in respect of brownfield sites should be 55 per cent., 60 per cent., 70 per cent. or 75 per cent. They had four targets in four days. They said that we could not reach our target but we reached it eight years early, and we are tightening up the process. So it is a bit of a cheek, given the record of the previous Administration, for the hon. Gentleman to use such arguments.
	The hon. Gentleman said that more houses in the south-east should be built on brownfield sites, but what does he think the Thames gateway is about? All 200,000 houses could be built in that area, provided that the money for the infrastructure can be found and long-term investment put in. Too often, short-term decisions have been taken; instead, I want to engage in the long term. Let the House together make the step change to meet the needs of our people. I will make a statement to the House about how all the various parts can be brought together. We need long-term thinking and long-term commitment. That is what this issue should be about; please join me in that aim.

Don Foster: I am slightly at a loss as to how to follow the hon. Member for Brentwood and Ongar (Mr. Pickles), but on behalf of the Liberal Democrats may I welcome today's statement and the fact that it rightly places housing and planning much higher up the political agenda? I welcome the admission of failure by the Deputy Prime Minister, but I acknowledge that he was right to say that Governments of all political parties have failed in the past. I welcome many of the proposals in the statement, but I wish to raise some matters of concern.
	On refurbishment, why will the money go only to those areas with arm's-length housing corporations? What will be the effect on other parts of the country? The hon. Member for Brentwood and Ongar mentioned briefly—and I am sure that the Deputy Prime Minister is well aware of this—the scandal of the 750,000 empty properties, including tens of thousands in London and the south-east. Will he acknowledge that it is a great shame that little is said in the statement on that issue?
	As 50th anniversaries have been mentioned, the Deputy Prime Minister will be aware that we are about to reach the 50th anniversary of the appalling floods in 1953. He mentioned the issue of sustainability, but can he tell us what protection he will give not only to the green belt but to the flood plains? Does he acknowledge that further building on the flood plains could seriously damage natural drainage patterns?
	I welcome the right hon. Gentleman's remarks about housing benefit, but will he acknowledge that other reforms to housing benefit are urgently needed, not least as the current bureaucracy of the system is of enormous disbenefit to both landlords and tenants?
	I welcome many of the arrangements that the Deputy Prime Minister is putting in place for planning. However, I am deeply disappointed that he is still not prepared to budge on the issue of rights of appeal for third parties. He should rethink that issue. While I acknowledge many of the proposals for speeding up major infrastructure project issues, I hope that he will accept that one additional proposal is desperately needed—that the relevant Secretary of State, having received the report from the inspector, makes a quick announcement about his or her decision.
	Like the hon. Member for Brentwood and Ongar, I am deeply concerned about the business planning zones. If they go ahead as currently proposed, they may mean that the very issues of sustainability, and high quality of design and build, will go totally out of the window.

John Prescott: I thank the hon. Member for his serious contributions to the debate and for his warm words. On refurbishment, we have tried to bring public and private finance together in those big operations to make public money go further. Like most public-private partnerships, the proposals are controversial, but some organisations have agreed to sign up for the process. We have moneys available for refurbishment of private properties, so funds will not pass only to the arm's-length companies. The scale may be different, because it will involve individual households or one or two private homes, as opposed to a large development.
	The hon. Gentleman makes a good point about empty homes, and I want to look seriously at that issue. Much more could be done by using the empty spaces in urban areas. For example, I encourage private companies to develop space above shops for housing, which has great potential. It is also important to do something about compulsory purchase powers, and that is why I have placed a document on that issue in the Library. We need to develop a comprehensive approach, and I shall make particular efforts in that area.
	On the issue of sustainability and flood plains, I would point out that the whole London area is what would be called a flood plain, and even my local area in Hull is designated a flood plain. However, both areas have barriers that have prevented floods in the past. What is critical is proper investment to protect the land, and in the latest announcement on public expenditure we increased the amount to be invested in those areas. Any new development must be protected against floods, because too many have not been in the past. Many changes have now taken place.
	I hear what the hon. Member for Bath says about planning. I am disappointed that he feels that I have not gone far enough, as the Conservative spokesman said that I had performed a U-turn. The document notes that third parties have a role to play in inquiries, and it does not outlaw that. However, we are against inquiries being dragged out unnecessarily for the sake of vested interests. The Select Committee on Transport, Local Government and the Regions thought that that was wrong, as did everyone consulted.
	The terminal 5 inquiry is often used as an example of how the process can drag on. I grant that that was exceptional, but it is not the only case. We must achieve a proper balance between the right of people who may be affected to have a say, and the public interest. The document in the Library tries to strike a better balance than was suggested in the earlier consultation document.
	Sometimes, as Secretary of State, I have taken passages out of my contributions to avoid taking up too much of Parliament's time. A passage that I removed today had to do with something that I have learned through my experience in the job—that the process takes too long once Ministers have been called in and have received a recommendation from an inquiry. I therefore propose to place a statutory enforcement limit on Ministers to ensure that they complete their role in time. I am asking local authorities to modernise, but I also accept that we in the House must do our bit too.

Andrew Bennett: I thank my right hon. Friend the Deputy Prime Minister for listening to the recommendations of the Select Committee on Transport, Local Government and the Regions, especially on empty homes and the planning system. That is extremely welcome.
	However, does my right hon. Friend accept that a fundamental problem in this country is that there is housing misery in the south-east because of the shortage of homes there, and a surplus of homes in many parts of the north? In his role as Minister with responsibility for the regions, will my right hon. Friend try and find ways to move some of the jobs that do not need to be in the south-east up to the regions? Will he work on getting it across to people that the north-west or north-east are very attractive places to live? If we could move some of the jobs to which I referred, we would be able to match housing and need.

John Prescott: I thank my hon. Friend for those remarks. He is Chairman of the Select Committee on Transport, Local Government and the Regions, and I always value the advice that I receive from Select Committees—although I admit that I value the advice of some more than others. However, Select Committees play a valuable role in the House in keeping Ministers on their toes when they argue their cases.
	I was especially appreciative of the report from the Select Committee on Transport, Local Government and the Regions on planning procedures, and I have taken its advice, especially on parliamentary matters. My experience in the House with the legislation for the channel tunnel and the Cardiff bay barrage has convinced me that discussing planning procedures here is not necessarily the quickest way of dealing with them. I took the Select Committee's advice on that.
	My hon. Friend made an important point about jobs. As I noted in my statement, the problem goes beyond houses: it includes health, education, transport and jobs. The reports coming out on the new community areas are interesting, in that they make it clear that there is a greater demand for housing when it is associated with economic development. We should plan the lot together. Regional development agencies and regional strategies will help us to achieve that—but the Opposition, of course, would abolish RDAs as part of what I understand is their drive against Stalinism.

Damian Green: The Deputy Prime Minister referred in his statement to the four areas that he has designated as having potential for very high growth, of which my constituency of Ashford is one. Although existing problems include an inadequate transport infrastructure, local health systems that cannot cope with the growth already taking place, and increasing problems with local schools, the interim results of the study to which the right hon. Gentleman referred have identified severe problems with the long-term supply of water, and suggest that much of the proposed new building would have to take place on the flood plain. If the right hon. Gentleman chooses to go for the high-growth option in and around Ashford, is he aware that he will be convicted of environmental vandalism in my part of Kent, and that the consultation exercise that he has indulged in for the past year will look like a complete sham?

John Prescott: I certainly hope that people do not think that. I am serious about consultation. Securing a step change such as I propose requires the co-operation of the people affected. No one gets such matters 100 per cent. right, but consultation must be taken seriously. The purpose of the studies and reports is to make an assessment of the situation, and to give people choices so that a debate can begin. That is exactly what I want to do.
	As regards Ashford, I take the point about the importance of infrastructure. Indeed, it applies generally. Anyone who looks at the new areas will see the investment in the transport infrastructure. That is almost the first requirement. As we know, Ashford has the channel tunnel rail link, which I was able to renegotiate after it had collapsed under the previous Administration. It will give us 50 per cent. more capacity on the lines coming into London, but we need to back up the infrastructure from Ashford. It does suffer from water shortages, although I recall visiting it during the floods. The problems of flood plains must be taken into account. I do not want to build in areas that face that threat. That is why extra resources are provided. I understand that Kent county council has made it clear that that is one of the areas for expansion. I want to have proper discussions about that.

Brian White: I welcome my right hon. Friend's statement as it affects Milton Keynes, and in particular the proposal for business planning zones, for which I have long campaigned. I welcome the fact that my right hon. Friend has rejected a policy of no growth and a free for all, and is concentrating on sustainable communities. As Milton Keynes is on the boundary of three Government regions, may I have my right hon. Friend's assurance that the three regions will work together to achieve the Government's objectives for Milton Keynes?

John Prescott: That is an important point, which applies not just to Milton Keynes but to the Thames gateway, where there are a number of authorities and regional development agencies. I suggested a new kind of vehicle to deliver regeneration better and more quickly, with the full co-operation of those bodies. We cannot act in defiance of them, so securing their co-operation is one of the challenges. My hon. Friend draws attention to Milton Keynes, which, together with the surrounding area, including Corby, is important and has always supported expansion as a growth area. The only difficulty is that the new Liberal council is against it.

James Paice: The Deputy Prime Minister's protestations about the green belt would be treated with more respect in Cambridgeshire if, when issuing his draft planning guidance, he had not made it not the last resort for development, but the second resort, after building within the city itself. What will happen to the Cambridgeshire structure plan, which is due to go to public inquiry this autumn? Will it be dropped now, or completed and then dropped? What is the future of the plan, which is currently guiding development? Will he heed the remarks of his hon. Friend the Member for Denton and Reddish (Andrew Bennett) about the need to attract development elsewhere? The right hon. Gentleman is addressing a problem caused largely by internal migration from elsewhere in the country. If we can persuade organisations and magnets such as Cambridge university and the biotech industries to move elsewhere in the country and develop satellite operations, that will start to draw development away from the huge melting pot in the south-east.

John Prescott: Cambridge is a success story, as everybody knows. The issue is how we deal with development, given the successful development of its economy and the demands of inward investment. A number of companies want to use the resources and land available there, which, in a way, is out of kilter with the local development plan. The hon. Gentleman raised particular points about the inquiry. I am not sure about all the details and what the position is, so I will write to him. Cambridge is an area that is growing. The challenge is to ensure that that growth is balanced and sustainable.

David Wright: May I tell my right hon. Friend that the statement is one of the most impressive housing statements that we have had in many years? I spent some 13 years working in housing before coming into the House. Today's statement is much better than some of those that we had from the Conservatives during the years that I was a housing professional. Can my right hon. Friend give us some reassurance about how regional housing strategies will be developed? Will he ensure that, in areas of low demand, new affordable housing is developed where housing clearance has taken place? This is not just a simple argument about new homes in the south-east and no new homes elsewhere. It is an important issue for many areas in decline.

John Prescott: I thank my hon. Friend for his kind remarks. He puts his finger on a difficult matter. The decentralisation of decision making and the regionalisation of discussions about housing are major changes. We have recognised that if we want a housing policy, we had better be clear about our education policy, the hospital programme and the infrastructure. That is the sustainable framework that we must establish. I shall shortly call a number of stakeholders together—the regional government offices, the Housing Corporation and the regional development agencies—to see how we can begin to take a regional view in developing a housing programme. Although I am announcing it today, the details have not been fully worked out. We stated in the regional White Paper that there will be a housing strategy on a regional spatial dimension, and we are working on giving guidance on that matter.

George Young: The Deputy Prime Minister has rightly identified the growing problem of affordability. In constituencies such as mine, doctors, nurses, policemen and teachers cannot afford housing. Of course, there is an appetite among the Opposition for solutions to the problem. Will he clarify what he said about intervening if local authorities do not deliver? Where a local authority has undertaken extensive consultation and produced a district plan, in accordance with guidance from his Department, and where that plan has been adopted up to 2006, or perhaps 2011, will the local authority still be exposed to the intervention that he mentioned?

John Prescott: With his knowledge of such issues, the right hon. Gentleman knows precisely that that is one of the major problems that we have to address. I could come to an agreement about housing, the programmes and our regional guidance on such matters, as I did in the discussion when some wide differences were expressed about Mr. Crow's recommendations on how many houses should be built in the south-east and how they should be apportioned to different local authorities. I sought to find a higher number, but one that did not involve greater land take because of the increased housing density that I propose.
	If there is a failure to meet the objectives under the planned monitor-and-manage approach, which I introduced when I rejected the predict-and-provide approach, the responsibility will be placed on local authorities. I will now open discussion with those authorities—I have given notice of that in today's statement—and some of them are already announcing not only that they are not meeting those targets, but perhaps that they have no intention of doing so. Perhaps they are leaving such decisions in the hope that a Tory Government will be elected to change things. We are not prepared to tolerate that because this is not a political issue only; it involves all those who have not got homes. The right hon. Gentleman refers to doctors and nurses, but homeless people and those in bed and breakfasts are also carrying the pain, and I will do everything that I can to relieve it.

Martin Salter: May I congratulate the Deputy Prime Minister on introducing brave, radical and much-needed proposals to address the chronic shortage of housing in the south-east? Of course, that shortage was made worse by the decision of the last Government but one to flog off police and national health service housing. The cheapest two-bedroom terraced property in Reading now costs about £160,000, requiring an income of about £38,000 to gain access to the necessary mortgage—well beyond the reach of teachers, police officers and health workers, whom we desperately need and simply cannot recruit.
	Does the Deputy Prime Minister realise that increasing the housing supply in areas such as Milton Keynes, Stansted and the Thames gateway will do little to address the problems in the Thames valley and that the Government will have to consider innovative and further measures, such as regional pay supplements or, indeed, interest-free loans, to bridge the equity gap that faces key public service workers in my constituency?

John Prescott: My hon. Friend makes a very sound point. Indeed, he refers to one of the problems that I have tried to address in the few weeks that I have been in the job. I hope that when I return to the House with a further statement on how to deal with that issue, I shall have a better idea of the balance that will have to be struck, although I readily recognise that identifying new communities or new towns for development does not necessarily solve that problem.
	An increased supply of houses will undoubtedly have an effect on prices, and all hon. Members will acknowledge that the shortage of supply is affecting prices. There are, of course, other economic considerations, so we cannot ignore the fact that this is not simply a housing problem. The issue of affordable housing in towns in the Thames valley, which my hon. Friend mentions, is a real challenge. I ask him to wait until we produce our proposals.
	There is a range of ideas. Some things have been done, but others have not, and I want to put them in a proper context. If I just chose an area such as the Thames valley or Thames gateway, and said that all the houses could be built there, would I be prepared to find the billions of pounds for the infrastructure? How could I get my colleagues in the Department for Transport to deal with the order of priorities? There are major changes. How could I get my other colleagues to ensure that there were the schools and houses to meet those requirements?
	I recognise that the different problems that my hon. Friend mentions cannot necessarily be solved by such an approach, but it can contribute to the solution. That is why I have to find a comprehensive framework. We have been too short term; we have concentrated on too many small issues; and we have got to make a step change, which is what I hope to do.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. Before I call the call the next Member, I say to the House that if there were shorter questions, and perhaps shorter answers, many more Members would have a chance to speak.

Andrew MacKay: Although the Deputy Prime Minister's announcement about brownfield site development in the south-east, particularly in the Thames gateway, will be very warmly welcomed, my constituents in central Berkshire will be amazed that his Government are still foisting so many extra unwanted houses on our area, when we have already taken more than our fair share. Cannot our excellent unitary authorities, Bracknell Forest and Wokingham, make the decision without him intervening and putting houses where people do not want them?

John Prescott: I am a little confused. My hon. Friend the Member for Reading, West (Mr. Salter) has just said that there is a desperate need for housing in his constituency. I do not think that the right hon. Gentleman's constituency is far from my hon. Friend's, yet he tells us that people do not want houses foisted on them. We need to sort out our priorities, which are: houses where they are wanted, at affordable prices, because everybody is entitled to a decent home. That is the challenge.

Howard Stoate: My right hon. Friend's statement will be welcomed by teachers, doctors, nurses and police officers in my constituency, where there are currently recruitment difficulties because of the cost of housing in the area. Will he ensure, however, that when extra houses come on stream in the area, especially in the Thames gateway, extra needs—transport, medical facilities and school facilities—are taken into account as part of the planning process? That will ensure that the houses are part of a sustainable development and that they do not simply add to the pressures on infrastructure.

John Prescott: I thank my hon. Friend for his remarks. Again, he has put his finger on a point that is absolutely crucial in the Thames gateway area that he represents. First, one cannot get investment in that area without the essential infrastructure investment to open it up. Following from that, one cannot just build homes; there must schools and hospitals, too. That is a real challenge. Long-term planning is necessary, not only in terms of housing, but in terms of education and health services. We need to put those things together, as I said in my statement. When I make my more comprehensive statement, perhaps we will see that we are agreed on how to achieve that.

Gregory Barker: The Deputy Prime Minister is right to focus on more affordable homes, on more environmentally sensitively built homes and on better designed homes. Is he aware, however, that the solutions that he has outlined today spell a very black day for local democracy and for local communities? The abolition of county structure plans, particularly in East Sussex, will only raise the fear that he intends to intervene over the top of local communities' heads. Why should those local communities have faith in his centralising socialist solutions, given that he is the same Minister who, five years ago, promised solutions to all our transport difficulties, since when our transport system has descended into chaos?

John Prescott: It is generally recognised by all involved—I have had time to read their reports—that there are too many plans in this area. We need to shape it better than we have before, which is why I have made these proposals. The hon. Gentleman's concern for county councils is very touching, in view of the fact that the Conservatives abolished three or four of them, county structure plans or not—[Interruption.] The hon. Gentleman may not have done so, but I assume that he belonged to a party in government that did.
	I am concerned about matters of planning and people to be consulted. The hon. Gentleman might think that this is a black day for democracy simply because we got rid of the county structure plans, but it is a much brighter day for those people who are looking forward to getting a house and a decent home. That is where our priorities lie.

Peter Bradley: I welcome the statement and the proposals for affordable housing and accessible jobs in rural communities, which will be welcomed in the rural part of my constituency, where Labour is holding its national rural conference this weekend. I am pleased about the announcement, too, for the urban part of my constituency, and for the millennium village at east Ketley. It is an exemplary scheme. It is mixed tenure to meet all housing needs on a brownfield site, and it is a trail-blazing partnership between English Partnerships and the local authority, including a contribution of some £1 million to schools in my constituency. Will my right hon. Friend assure the House and communities in new towns that this connotes the beginning of a new relationship between English Partnerships and local communities and local government, in which it will help to meet needs and solve problems, to which, in the past, it has all too frequently contributed?

John Prescott: I thank my hon. Friend for his kind remarks and for welcoming the millennium village concept at the community buildings in east Ketley. The review with English Partnerships is in its final stages. I envisage a strong and good role for English Partnerships in bringing groups together to ensure that we get the requirements for housing that are proposed in the millennium projects.

Richard Younger-Ross: I congratulate the Deputy Prime Minister on using the phrase "quality of design" several times in his statement. In that context, will he consider the documents prepared by his Department to ensure that quality of design is writ large throughout them? Will he also consider some of the contradictions that might lower design quality? Local authorities have to be able to set standards of design quality for business zones. Will he introduce general development orders for ports and docks so that they, too, have such standards? Finally, the right hon. Gentleman is going to get rid of the institutionalised bribery and corruption of section 106 agreements and introduce a system of tariffs. What impact will that have?

John Prescott: The hon. Gentleman makes an important point about industrial buildings, which we have seized on. We could get much more from such buildings. The designs of industrial buildings in some parts of our towns are a disgrace. They may win architectural awards, but I notice that the architects do not live in them. In such circumstances, it would be useful to combine the two aims. The Peabody Trust is doing some interesting work on that. Building design is important and I want to see more of it. It adds to the confidence of an area. That is why we recently produced a study on the built environment. I am keen on that and have already talked to a number of architects and developers to ensure that building design is taken into account.

Anne Campbell: I warmly welcome my right hon. Friend's statement, representing, as I do, a constituency in which housing is so expensive that the average university lecturer can no longer afford to live in the city. When he considers the county council structure plans, I urge him not to abandon the one on which Cambridgeshire county council is working. We are in desperate need of more land for housing because of the acute shortages. Much work has been done on the structure plan, and I hope that he will not put a question mark over its future at this stage.

John Prescott: To be honest, I am not sure how to respond and will write to my hon. Friend. The matter that she raises could be a transitional problem of working to a certain plan. I want to do what is possible and best rather than laying down a rule that is then rigidly interpreted.

Henry Bellingham: Does the Deputy Prime Minister recall coming to King's Lynn during the last election to announce the start of a millennium community in South Lynn, part of the Nar-Ouse regeneration area—NORA—scheme? His visit was a great success and helped to bolster my support. Is he aware that the scheme is crucial to regenerating a proud community? It will help to sort out a number of eyesores and land that has been derelict for a long time. Does he realise that part of the land has recently been sold? There is also a question mark over the start date. He is respected in my area. Will he visit us and give the scheme a kick-start?

John Prescott: As the hon. Gentleman says, I visited that site. I am pressing hard to get the millennium developments up and running. They are not simply about providing houses. They offer a whole new approach to communities, involving design, environment and sustainability. I am delighted one such project was awarded to King's Lynn. I hope to visit a number of the projects and to take an active role, whether it is in King's Lynn or elsewhere. But does he want me to visit his constituency to improve his contacts, because I could always come down and damage them?

Chris Pond: May I suggest that my right hon. Friend invites Opposition Members who are sceptical or nervous about the proposals to visit my constituency, in particular Gravesend town centre, which already provides high-quality affordable housing within a regenerated town centre for the key workers that we so desperately need? Given that north Kent is subject to a number of infrastructure investment projects, which are important for our future prosperity, will he underline his commitment to the fact that the consultation process will not be damaged by the streamlining of planning, which we all welcome? Will he assure me that my constituents' views will be heard?

John Prescott: I agree with the point that my hon. Friend makes about Gravesham, which is an important area in the Thames gateway. I am well aware, although I have not seen some of it, of the excellent work that is done through the combination of the Housing Corporation and the local authority. I would like to see more of that. That is one of the reasons why my right hon. Friend with responsibilities for regeneration will be leaving the Chamber after questions on the statement to visit the area that my hon. Friend represents. Perhaps he could then start the discussion.

Mark Francois: There will be great concern in my constituency about what the Deputy Prime Minister has announced this afternoon. I ask him a question about principle. Planning powers currently rest, rightly, with locally elected councils. What is the point of people continuing to vote in local elections if the councillors whom they subsequently elect can have thousands of houses rammed down their throats by regional quangos? Will the right hon. Gentleman confirm that establishment of the quangos that he has announced will require primary legislation?

John Prescott: I have not announced any new quangos today. We are talking about organisations that are in place. I want to bring in regional governance, which will make these bodies accountable. I understand that the policy of the Conservative party is to get rid of regional accountability and have more and more quangos. That is the Conservative party's history.
	Accountability and planning are important parts of local democracy. We are not abolishing the process but strengthening it. There is controversy about the counties but we are not abolishing their planning role. We are abolishing structure plans, but we are giving the counties certain statutory powers that they already have in terms of mineral rights, transport and statutory consultation, for example. The counties are important, but the issue is about getting a proper balance.
	I am trying to achieve a balance that is more effective and more efficient in terms of what the hon. Gentleman calls unwanted homes. I do not know what people feel when they hear Members saying, "We don't want any of these homes. We don't need them." Housing is a national responsibility, and the responsibility of the House is to provide it. Even if the people who need housing are not in his constituency, they are entitled to be considered.

Michael Jabez Foster: May I thank my right hon. Friend for the commitment that the Government have made to the welfare of Hastings, and especially today's decision that it will have the status of a millennium community? My right hon. Friend is absolutely right when he says that these new communities will work only if transport infrastructure is available. Roads are not easy to build. Will he use his influence to ensure that the Strategic Rail Authority gets on with the job of electrifying the Ashford line and providing new signalling so that the millennium villages really can work?

John Prescott: My hon. Friend reminds me that it is always easy to talk about infrastructure investment in various areas. When I had responsibility for transport, he often asked me to do something about road communications with Hastings. He will know that a considerable amount of extra money has been made available for transport. He will know also that reviews are under way. I hope that he is more successful, but I thank him for his kind words about the millennium community.

David Curry: Where a local authority has an adopted plan, it having been adopted in entire conformity with the Government's guidance, does the Deputy Prime Minister intend to overrule its provisions? Is he to call in every development where the density is fewer than 30 houses per hectare? Will there be a size threshold? Does that run alongside or instead of the provision on social housing? What are the implications for the size of the inspectorate and the cost of it, public inquiries and delays in approvals?

John Prescott: Provided that the plan is in conformity with the Government's advice, I have no intention of overruling it.

Jeremy Corbyn: I welcome the Government's commitment to improving and increasing the housing stock. Will my right hon. Friend turn his attention to the problems of inner London, where there is enormous housing pressure. There are very high rents in the private sector, enormous numbers of people are on waiting lists and, tragically, a huge number of people are living in bed-and-breakfast accommodation.
	Will my right hon. Friend do his best to ensure that local authorities have the resources to buy whatever land becomes available, and that that will apply likewise to registered social landlords? Above all, will he ensure that planning laws are so implemented that 50 per cent. of all residential development sites are used for affordable rented housing? At present, most of these sites are very small, and therefore are way outside the guidelines that apply elsewhere.

John Prescott: I agree with the central thrust of my hon. Friend's point about providing more affordable homes in London. That can be achieved through smaller developments, as provided in the Mayor's London plan. We have not yet responded to that, but I believe that a great deal more can be done. I am in active discussions with London authorities about planning, resources and the framework in which these things are done.

Anthony Steen: I welcome the spirit of the Deputy Prime Minister's statement. The entire country needs more affordable low-cost homes—we certainly need them in the south-west. If affordable, low-cost housing is to be built for sale, we need the funds or we need to subsidise the developer. If Government funds are provided, the purchaser receives Government help. Without a covenant, the home will be sold on the open market and therefore will be lost for ever to the low-cost housing regime. Does the right hon. Gentleman propose to subject every sale to a covenant, and so lock the house into low cost? If he does that, those living in it will never be able to afford to get on the housing ladder. How will the whole thing work?

John Prescott: I thank the hon. Gentleman for his kind remarks. I hope that I will be given more encouragement, given the spirit of the approach. It will be much better if we can get more co-operation, rather than the spirit of some of the earlier exchanges following my statement.
	The hon. Gentleman puts his finger on a difficult problem. There are various difficulties. For example, we are putting a great deal of money into areas such as Hull to knock down houses, but at the same time we are trying to get money to build houses in areas where they are needed. It is important to bear that in mind. We must ask whether unwanted houses should be knocked down and about the priorities given to using existing resources.
	We appear to be trying to find money to meet the difference between the market price and affordable housing. That is not easy in areas such as the delightful one that the hon. Gentleman represents, where the demand is from people elswhere who want to move to them to retire. That raises the real issue of communities providing housing for those who live in the area. The same may apply in the south-east or in rural areas. People are being told, "I'm sorry, you can't live by your parents; leave the community." That is unacceptable, and it is as true in a rural area as it is in parts of the south-east, and I shall address the matter.
	Under the right to buy, property in urban areas is bought at a very discounted price, but it is then sold back to the state at a high price when improvements are sought. That is costing us millions of pounds. We must ask ourselves, what is the proper balance? These are difficult questions, and I have no easy answers. The difference between the price of a house and what is affordable goes right to the heart of these matters. I shall address the question in the coming months and return to the House with what I think is a conclusion.

Paul Clark: I welcome the statement, which is firm and fair in terms of housing policy. Within the Medway towns alone, the council estimates that, over the next 20 years, 20,000 more homes will be required just to meet the immediate need of the indigenous population. One of the reasons for the housing crisis is that from the mid 1980s, for 10 years, the Conservative Government allowed developments of fewer than 20 houses per hectare.
	I welcome my right hon. Friend's comprehensive approach in having a transport, social and environmental infrastructure. It will be delivered by Government Departments, but what steps is he taking with developers and other parts of the private sector to engage them fully in delivering the necessary infrastructure?

John Prescott: My hon. Friend makes a valuable point about getting all the stakeholders involved. It is not just a simple matter of encouraging local authorities to do more; we must include the private sector, including the builders. We must also consider the argument about whether the land is being held back, or whether it is being used for a better purpose that is to the advantage of the community.
	On high density, I take the point that the previous Administration reduced the average to 20 houses per hectare. However, I said before that the housing situation has been declining for decades under all Administrations and we need to make that step change. I tried to address the issue of high density when I came to the House two years ago to announce some of these matters. The average for the south-east appears to be 24 per hectare, but in Islington, or elsewhere in London, there are areas of Georgian property where the density is 80 per hectare, yet prices are going through the roof. The millennium project community in Greenwich has a density of 90 per hectare. That is an example of what good design and an imaginative approach can do in bringing some of these issues together and that is what I must try to do.

Ian Taylor: The Deputy Prime Minister has touched on a difficult problem. In my constituency in Surrey, the average house price is more than £300,000 and there are social housing problems. However, I am concerned that if he is going to override the local authority, there must be a judgment as to how best to deal with it. We cannot just have new houses built at 30 per hectare in a constituency that does not have brown land. That will mean that in-filling is the only way. Is the Deputy Prime Minister proposing to call in all plans and then impose further density restrictions? I have to tell him that the infrastructure locally is under strain and that it would be better for him to boost the payments to Surrey county council so that we have a greater social services spend that we can use.

John Prescott: The hon. Gentleman makes an important point. I am not satisfied that all the brownfield sites have been identified. One of the curious things about housing is that all of the land that may be available for housing is not recorded in a form of land bank information. I have asked English Partnerships to see whether we can find more.
	On the question of the density of housing per hectare, in the south-east, the average is 23 to 24 per hectare; that is the lowest of any developed economy. I do not believe that we cannot lift that higher than 23—say to 30, as I am suggesting, as a minimum—and, with good design, still get good quality housing. We can do that, but I suspect that it will be more profitable to build executive houses at 23 or 24 per hectare. I still think that a density of 30 per hectare can be profitable, and I am quite prepared to discuss that.
	The hon. Gentleman asks what happens if the local authority does not agree. The answer is that it is the same whatever the number is. Let us say that the number was half what I announced for the south-east; there would still be some who said that they did not accept it. The responsibility is to find homes for people who live in areas with problems of supply and demand, where we are left with the kind of problems that we have at the moment.

Joan Ruddock: I congratulate my right hon. Friend. How much money will come through the Housing Corporation in general, and how much through the Housing Corporation in London? Can he assure me that in multicultural areas such as mine, registered social landlords will still be able to build larger housing units because, in those communities, the larger family is still the norm and Londoners are six times as overcrowded in their housing as people in the rest of the country?

John Prescott: I recognise the point made by my hon. Friend about overcrowding in London and the desperate need for housing. That must be a high priority. The mayor has made the position clear in his statement and we will be doing what we can to help. We have provided £1.5 billion extra for housing, which is a sustainable increase. Some of that will be going to the Housing Corporation, but I said earlier that I want to talk to the various institutions that have a role to play to see how the money will be used. We have made more money available and we must be sure that it is used effectively.

Simon Burns: Can the Deputy Prime Minister clarify the position with regard to Stansted and the Stansted corridor? Does he anticipate much of the housebuilding being concentrated on the immediate area of Stansted? How far into the hinterland of Essex, and particularly mid-Essex, might that corridor extend? What bearing will the right hon. Gentleman's statement have on the draft plan inquiry that is expected to be held next year in Chelmsford on its existing housebuilding proposals?

John Prescott: I am very much involved in the planning responsibilities, so I cannot answer that question. However, I will see if I can give the hon. Gentleman a more informed answer about the inquiry. With regard to the study of the M11 corridor—Stansted-Cambridge—that is an important matter and I have announced today that it is one of areas on which we want to concentrate. I have only just received the report and I cannot answer him now, but it is an area that we have identified. One of the significant features of development in communities is that airports are a very important part of regeneration.

Strategic Defence Review

Geoff Hoon: Following the appalling events in New York and Washington on 11 September last year, I launched work on a new chapter to the 1998 strategic defence review, designed to ensure that our defence policies, capabilities and force structures matched the new challenges that were so vividly and tragically illustrated on that day.
	The SDR recognised the potential threat from new forms of terrorism. It recognised such asymmetric attacks as one of a range of tactics that an adversary might use. But the attacks on the United States showed that such attacks could have strategic effect. We have consulted as openly and widely as possible on the new chapter. In February, we published a discussion paper outlining some of our emerging thinking. Last month, we published a further discussion document, setting out proposals for enhancing the role of our volunteer reserves in home defence. Rarely has a defence White Paper had contributions from so many individuals and organisations. I am grateful to all of those, especially in this House and the other place, who have contributed.
	Today we are publishing that groundbreaking White Paper, setting out further and more detailed conclusions, particularly in the area of capabilities to counter terrorism abroad. The White Paper covers a wide range of defence issues, but central to them is the way we want to use our forces against a determined, mobile, often disparate and elusive enemy. We must be able to get the right forces quickly to where we need them, make better use of intelligence to identify the threat, decide how to deal with it and then strike, decisively. This is known as "network-centric capability", but it can be summarised more simply as "detect, decide and destroy". It means being able to strike hard and fast, cutting down the enemy's time to think, plan and act. I will explain later how we intend to achieve this.
	First, I should like to deal with the budget planning on which our ideas are based. The Government have already made £359 million available to fund operations in and around Afghanistan, including the cost of the new equipment our forces needed for these specific operations.
	Further significant resources will be made available during the current financial year to enable us to manage the pressure arising from the high levels of activity in which we are currently engaged. But the new chapter is about planning for the longer term. International terrorism and other asymmetric threats are long-term challenges. To plan effectively, we need a solid foundation of resources. I am delighted to say that the results of the spending review—set out by my right hon. Friend the Chancellor of the Exchequer earlier this week—provide an excellent basis from which to take forward our commitment to strong defence. It represents the biggest sustained real increase in defence spending plans for 20 years.
	The defence Budget will rise by £3.5 billion by 2005–06 compared with this year. This means growth in real terms of 3.7 per cent. over three years; around 3 per cent. in 2003–04 alone. Within this settlement, the Government are making available over £1 billion of new capital and a £0.5 billion increase in the resource budget for the equipment and capabilities that the armed forces need to meet new challenges. It provides a mandate for accelerating the modernisation and evolution of the armed forces.
	To ensure that we maximise the resources available to deal with new threats, we are taking further steps to improve the efficiency and effectiveness with which we deliver defence outputs. The defence change programme is focused on reforming the Department's business processes. It covers projects across defence, particularly logistical and supply systems and information systems. Recent operations have underlined the crucial contribution of our logistical organisations in supporting operations over long distances. Our aim is to continue to drive down overheads in order to maximise our front-line operational forces.
	Since the events of 11 September, all areas of government have been involved in enhancing our arrangements for dealing with the threat from international terrorism. The Government have developed a broad-based strategy aimed at tackling international terrorist groups, ranging from cutting off their finances, through law enforcement, to military action. We recognise that a successful campaign will need to address the origins and causes, as well as the consequences, of international terrorism.
	The armed forces have two principal roles in countering terrorism: home defence and action overseas. Although assisting in the defence of the United Kingdom is a key element of the campaign, long experience indicates that a wholly defensive posture will not be enough. Terrorism thrives on the element of surprise, and one of the key ways to defeat it is to take the fight to the terrorist. We must be able to deal with threats at distance—to hit the enemy hard in his own backyard, not in ours, and at a time of our choosing, not his, acting always in accordance with international law.
	As well as helping to deal with the long-term causes of terrorism, we have identified several ways in which our armed forces, in partnership with other areas of government, can contribute towards a long-term campaign: first, by helping to prevent terrorism emerging; secondly, by deterring terrorist groups and states that might harbour or support them, or to coerce states to stop harbouring them; and thirdly, by disrupting terrorist groups and, in the last resort, destroying them. Our ability to operate alongside the United States and other allies, especially in Europe, will be essential to our future success. In the United Kingdom we have certain capabilities which many of our allies do not possess. Others, equally, can bring their own skills and equipment to the table. That role specialisation is crucial if we are to provide the overall military capability that future operations require. For example, at Bagram airbase in Afghanistan, Spain provided an excellent hospital facility, while the Jordanians and the Danes provided crucial mine clearance specialists. Other nations provided other specific capabilities. The overall effect was quickly to create a base on a scale that no single nation could have matched.
	To be able to make such contributions, armed forces need to be ready to undertake three types of military tasks. First, there are stabilisation operations, for example the kind of operation undertaken by the interim security assistance force—ISAF—in Kabul this year and in Macedonia in 2001.
	Secondly, there is deterrence and coercion. If an established state is harbouring or supporting a terrorist group, it may be necessary to threaten the use of force. Potential aggressors should know that we will use all our resources, military and non-military, to deal with their activities, reduce their chances of success, and ensure that the United Kingdom can act to defend itself and its interests. Aggression against us will not secure political or military advantage, but will invite a proportionately serious response.
	Thirdly, there are find-and-strike operations such as those undertaken by the US-led coalition in Afghanistan. If terrorist groups continue to operate and to pose a threat, it will ultimately be necessary to disrupt and destroy them. Operations can range from interception at sea, which requires specialist boarding capabilities, to engagement by combat troops or with precision weapons.
	We recognise that in future we may have only fleeting opportunities to strike at the enemy. That is where network-centric capabilities come in. Terrorist groups show themselves as little as possible. As Afghanistan has shown, it is vital to have the best available intelligence and communications to allow a rapid decision about when and where to attack. We need to be able to identify the enemy fast, then bring the necessary weaponry to bear in the shortest possible time. We need the sensor and the shooter to be better linked by a real-time network—we want to be able to detect, decide and destroy. That requires extra investment in airborne and other sensors, so we will upgrade the E3D AWACS aircraft. It also requires extra investment in networks to pass information quickly to allow strikes by sea-launched or air-launched missiles, by artillery, or by troops on the ground. That will give us more control of the battle space, hunting down the enemy, identifying targets, then hitting them hard.
	Unmanned air vehicles will play an important part in the system. US forces in Afghanistan demonstrated how effective they can be in providing persistent surveillance of the battlefield or theatre of operations without putting the lives of aircrew at risk. Some of the American UAVs also provide an attack capability. I can announce today that we are accelerating our own UAV development programme—known as Watchkeeper—and will invest in state-of-the-art technology in that area in coming months. We have learned a great deal from the use of our Phoenix UAV in the Balkans, a system which was designed as an artillery spotter, but quickly took on a far wider intelligence-gathering role. Advances in datalink technology mean that modern UAVs offer greater potential for improving operational effectiveness. Certain issues of commercial sensitivity surround the Watchkeeper programme, but we expect shortly to select the two consortiums to work with us on the next phase of the project.
	I can announce that we are setting up a new joint service trial to begin testing prototypes of the Watchkeeper system early next year. We will evaluate additional enhancements to our target acquisition and strike capabilities to enable them to operate 24 hours a day, in all weathers, and to enable rapid retargeting.
	The work on the new chapter has also confirmed the increasing utility of special forces. It is not our policy to comment in detail on those forces, and I do not intend to do so today. However, I can say that we will be enhancing the capabilities of our special forces, particularly their key enablers, maximising their utility and flexibility.
	The strategic defence review said that the size and shape of our armed forces should be determined principally by the requirements of operations in Europe, the Gulf and the Mediterranean. But terrorist groups such as al-Qaeda can operate worldwide and tend to hide in remote, ungoverned areas. Some small-scale operations may need to be conducted both further away and in areas with little or no local infrastructure. I can tell the House that we are looking at the use of more rapidly deployable and sustainable light forces and ways of improving their mobility and firepower. Operations in Afghanistan have again shown the importance of support helicopters, and we are examining possible enhancements in that area. We are also pursuing the concept of a family of air transportable medium-weight armoured vehicles—the future rapid effect system. In addition, we will accelerate the introduction of additional temporary deployed accommodation for our troops and further improve its hot weather capability.
	We will also need to deal with a greater risk that terrorists will acquire chemical, biological, radiological—and potentially even nuclear—devices. We need specific capabilities to deal with such devices safely and to ensure the protection of our own deployed forces—and, indeed, of wider United Kingdom interests. Detailed techniques will have to remain secret, but I can say that we will acquire appropriate technology to meet the threats from CBRN weapons that we may face in the future.
	There has already been some speculation about what the new chapter work might mean for the structure of the armed forces. I emphasise that it is focused on ensuring that we have the capabilities that we require. That will probably need some adjustments in order slightly to rebalance the force structure, but there have certainly been no decisions about any specific changes.
	In the United Kingdom and in our overseas territories, domestic security is the responsibility of the civil authorities, particularly the police. When the armed forces are used, it is at the specific request of the civil authorities. We are therefore strengthening arrangements for liaison with the civil authorities at national and regional levels of government by creating joint regional liaison officers to act as a single point of liaison on emergency planning matters. In addition, we will establish reaction forces of around 500 reservists from volunteer reserve units of all three services in each of 11 areas of the country—some 5,000 to 6,000 reservists in all. They will aid the civil authorities in handling major incidents, with individuals committing themselves to turn out at short notice for a range of duties, including site search and clearance, transport and communications, control and co-ordination.
	We have already taken steps to improve the ability of the United kingdom's air defences to respond to threats from rogue aircraft. Further enhancements to our radar systems are in hand. We are investing in airfields across the UK—RAF Marham in Norfolk, RAF St. Mawgan in Cornwall and RNAS Yeovilton in Somerset—so that they can support quick reaction alert aircraft when needed. Those are in addition to the bases that are already able to operate such aircraft, and will give us greater flexibility in our air defence arrangements. We are also considering seaborne threats—the armed forces supported the civil authorities in intercepting a suspect vessel in the channel approaches in December last year.
	In the new chapter work, we wanted to avoid placing unmanageable demands on our people. We recognise that for a considerable time many of our service men and women have been working at or near—in some cases beyond—the boundaries of what was planned in the SDR. They have borne those challenges with their customary professionalism and determination. So have their families. I take this opportunity to pay tribute to them for the way in which they have shouldered those burdens. The needs of our people are a top priority for us. We will continue to work hard to deliver the real and sustainable improvements that they and their families deserve. Simultaneous operations place a particularly heavy burden on our enabling forces—crew for strategic aircraft and ships, logisticians, signallers, engineers and so on. We will work to ensure that we do not ask more of them than is reasonable.
	The new chapter to the strategic defence review provides a firm foundation for responding to the threats demonstrated on 11 September. Together with this week's comprehensive spending review, which provided the largest sustained real-terms increase in the defence budget for 20 years, the Government are ensuring that the United Kingdom's armed forces have the investment that they need—investment to deliver new equipment and enhanced capabilities and to be a force for good in the changing strategic environment. I commend the new chapter and the defence spending settlement to the House.

Bernard Jenkin: I thank the Secretary of State for his statement and for providing me with an advance copy, with the supporting documentation and the new chapter of the strategic defence review.
	On Tuesday, the Prime Minister made it clear that the potential threat that Iraq poses is "enormous". At such a time, we should emphasise that far more unites Her Majesty's Government and the official Opposition than divides us. Whatever differences are aired between us this afternoon about the spending review and the new chapter, the House and the nation should bear in mind that we share the same dedication to basic democratic values, the same commitment to the war against terrorism and the same determination to face down dictators such as Saddam Hussein.
	For a long time, we have said that the 1998 strategic defence review was underfunded. I therefore begin by welcoming the increased allocations for defence in the comprehensive spending review. However, we must put the increases in perspective. The Chancellor disingenuously claims a
	"rise of £3½ billion a year".—[Official Report, 15 July 2002; Vol. 389, c. 22.]
	The Secretary of State for Defence repeated that claim today, and I fear that Labour is up to its old tricks again. [Interruption.] The Chancellor said that on Monday. Labour Members should read Hansard, which I have checked.
	The House of Commons Library confirms that, on the internationally accepted measure of defence cash spending—the traditional measure—the increase in real terms is only £1.2 billion for the three-year period. Before Labour Members crow that the years of decline have been ended, I point out that the Government will not only spend less in 2005 than last year—for understandable reasons, which reflect the extra costs of the war in Afghanistan—but they will spend less than the Conservative Government in their last year in office when my hon. Friend the Member for Mid-Sussex (Mr. Soames) and my right hon. Friend the Member for North-West Hampshire (Sir George Young) were Defence Ministers.
	Defence spending as a proportion of gross national product will continue to fall from the 2.9 per cent. that Labour inherited from the Conservatives to 2.2 per cent. in 2005. That is well below the SDR target of 2.4 per cent. that Labour set in 1998. Are the days of overstretch and underfunding truly over? I doubt it. I share the Secretary of State's admiration for the people in the armed forces, but I hope that the Government will not continue to take them for granted.
	There is much to welcome in the new chapter, not least the thoughtful doctrine that the armed forces have started to develop for the war against terrorism. It rightly goes far beyond the use of simple military force. I reiterate our welcome for the increase in aid spending, which is vital in the war against terrorism.
	We welcome the Secretary of State's intention to spend more on digitising the battlefield and on support staff and headquarters. However, that must not be at the expense of front-line ground troops, who are always decisive. They proved that in Afghanistan, Sierra Leone, Kosovo, the Gulf and every serious military conflict in history. It would be dangerous for the Government to believe that our armed services can remain effective if they continue to reduce in size, however network-centric they become. Surely the Government have learned the lesson since 1998 that we need to put more boots on the ground. Although the Secretary of State has abandoned the 1998 manning targets for the armed forces and made a commitment to increasing the size of the Army, will he assure hon. Members that he has no plans to disband or merge regiments simply to make ends meet?
	We have long harboured the suspicion that the Government will use under-recruiting as an excuse to scrap Scottish regiments such as the Black Watch and the Royal Scots Dragoon Guards. Will the Secretary of State spell out clearly what he meant when he said that an adjustment would probably be required to rebalance the force structure? When will he announce the detail of the review of force structures, which is likely to be far more controversial than his good news today?
	In the coming weeks and months, we will study today's announcement and its implementation. The new chapter contains omissions, which worry us. Many European Governments and NATO, presumably supported by the Secretary of State, are already committed to the development of theatre missile defence systems. Where is the Government's much vaunted leadership in Europe on that? Even under the heading of force protection, the new chapter does not mention the missile threat. Why does not the document tackle the dispute between NATO and the European security and defence policy that is now in its fifth year?
	Hon. Members should broadly welcome the Secretary of State's announcement today. However, I reiterate that the Government have so far failed to fund the defence capabilities that they promised in the 1998 strategic defence review. We must hold the Government to their commitments. The defence capabilities that are essential to safeguarding national security and fulfilling our international obligations must be fully funded. The next Conservative Government will do that.

Geoff Hoon: I am grateful for the hon. Gentleman's words of support at the beginning of his remarks. I am sorry that he did not see that through by studying more carefully my comments and those of the Chancellor. Let me deal with the hon. Gentleman's first whinge about the £3.5 billion. I clearly said that the defence budget will increase by £3.5 billion by 2005–06 compared with this year. The figure therefore applies to the CSR period. I did not claim anything else, and I am not aware that the Chancellor did so. The hon. Gentleman was responding to my statement and to avoid doubt, I emphasise that the £3.5 billion will be spent over the three years.
	The figures have been published since Monday, and I am again a little disappointed in the research effort that the Conservative party puts into supporting the shadow Secretary of State for Defence. It has been found wanting, and not for the first time. If the hon. Gentleman wants to know the total cash increase, calculated on the previous basis, I shall provide the figures. In the first year, the increase is £700 million; in the second year, it is £972 million, and in the third year, it is £1,244 million.

Bernard Jenkin: Real terms?

Geoff Hoon: They are real-terms increases, after inflation has been taken into account. If I were one of the hon. Gentleman's researchers, I would be examining my terms and conditions of employment. They are simply not doing their job.
	On the jibe about the percentage of GNP, the hon. Gentleman needs to consider more carefully the state of the economy at the time to which he referred and compare it with that today. In effect, he pointed out the success of the Labour Government in increasing economic growth and ensuring that we have more people in work and paying taxes than at any other time in the country's history. I therefore take his comments as implied congratulations on the success of my right hon. Friend the Chancellor's economic policies, which are allowing us to deliver on defence and the full range of public services.
	The hon. Gentleman mentioned more boots on the ground. If he had read the strategic defence review carefully, he would know that the targets for manpower in the armed services were indicative. They change year on year, and that has always been the case. Perhaps he might consult some of the hon. Members behind him who have done a ministerial job in the Ministry of Defence. If he chooses to ask them, they will tell him that those figures for manpower targets change annually, according to the needs of the armed forces, and that Ministers do not have specific control over them. Indeed, that can be one of the frustrations of the job, as those issues are determined by military requirements set by the chiefs of staff. If he knew anything about it, he would see the that the same argument arises in relation to force structures, as the issues are constantly changing. If they did not do so, we would be left with the armed forces that we required at the end of the 19th century, never mind those that we require at the start of the 21st century. Of course, those changes will be announced to the House at an appropriate stage, but they are not significant. I assure him and the House that no substantial changes are involved in the size or organisation of our historic regiments.

Paul Keetch: I, too, thank the Secretary of State for the advance copy of his statement and the White Paper and supporting documents.
	At least between the Liberal Democrats and the Government, there is a great deal of cross-party consensus on the continuing relevance of the conclusions of the SDR and the broad balance of the forces that the UK requires. However, it is always necessary to make adjustments even to the best-laid plans, so we believe that our defence policy should always be regarded as work in progress. We support much of what the Secretary of State has announced today on special forces, reservists, intelligence gathering and unmanned air vehicles.
	Does the Secretary of State agree, however, that the greatest threat to our forces is still the problem of retention? Several branches of our armed forces, such as the defence medical services, are chronically under strength. What part of what he announced today will help recruitment and cut the number of men and women leaving the services? It is easy to pay tribute to those personnel, as we do, but we must match those fine words with deeds.
	Does the Secretary of State agree that much of the campaign against terrorism will be undertaken without recourse to B52s or Marines and will be fought by accountants and diplomats? Does he therefore agree that there might be a case for ensuring that a single Cabinet member is responsible in the UK for all aspects of defence against international terrorism?
	Finally, the Secretary of State should be proud of the victory that he has achieved against the Treasury. It is not bad. I am not sure that it is excellent but, in short, the men and women of our armed forces will receive the statement with relief rather than rapture.

Geoff Hoon: I am grateful to the hon. Gentleman for his support, especially for the special forces.

Menzies Campbell: It is hardly surprising.

Geoff Hoon: I could not possibly comment on whether that is surprising.
	On retention, the hon. Gentleman is right. I have made no excuse at all: retention remains a challenge. We are doing remarkably well with recruitment in a very healthy economy, but clearly retention could improve. A number of specific measures have been taken, such as those relating to pilots, but we still need to do more and I make no apology for saying so. The Budget settlement will give us a degree of flexibility to address some of those issues, and not least the very difficult question of accommodation. As I have told the House before, some of the accommodation that is available, especially to single men and women, is in a shocking state and has been neglected for very many years. Sadly, accommodation is one of those areas on which it has been most easy for previous Governments to turn the other way and not allow appropriate investment. It is therefore important that we carry through the £1 billion programme for improving accommodation, especially single living accommodation.
	I am also grateful to the hon. Gentleman for his comments about the Budget settlement. I emphasise that there is a five-year programme of steady increases in the amount available to defence in real terms. That will allow us to plan over a long period for the success of Britain's armed forces.

John Smith: I warmly welcome my right hon. Friend's statement. I believe that it was a measured and realistic response to the dreadful events of 11 September. There is always a danger that Governments will give a knee-jerk reaction and do things for show that have no great effect.
	I accept entirely the need for greater global reach, flexibility and versatility, and the ability to deploy rapidly. However, given the delay in the A400M aircraft, is my right hon. Friend satisfied that we have the lift capability to allow us to deliver that versatility for the future?

Geoff Hoon: I am grateful to my hon. Friend for his comments. In a sense, the document represents a continuation of work in progress, as it is a continuation of the work successfully conducted in the strategic defence review. Inevitably, further work is required to ensure that we have the right capabilities as the potential of the enemy with which we must deal develops and expands. That is why we have placed so much emphasis on global reach and flexibility.
	On my hon. Friend's specific point about lift capability, there is a very attractive photograph of a C-17 somewhere in the White Paper. C-17s are certainly available and have performed magnificently since we first leased them. Clearly, they are preparing the way for the A400M aircraft, which will provide still greater lift capability to the United Kingdom.

James Arbuthnot: More money for the defence budget, especially in the light of 11 September, is of course to be welcomed and the Secretary of State is to be congratulated on that. However, does he agree with the House of Commons Library, which suggests that in each year of the Conservative Government, the near-cash constant prices spending on defence was higher than in each year of this Government and each year that is planned? Does he not agree that that is a rather disappointing reaction to 11 September?

Geoff Hoon: More money was available for defence even before 11 September. In talking about a five-year period, I was referring not only to the current CSR round, but to the last one. In each of the three-year periods, there was a planned growth in expenditure. I have not seen the figures from the Library. I will certainly look at them very carefully, but it is extremely doubtful whether such a comparison could be made, as the figures with which we are dealing represent real-terms increases year on year.
	The problem that I have with those on the Conservative Front Bench—I exempt the right hon. Gentleman—is that they do not appear to understand the basis on which the budget for defence is arranged. They have issued a series of statements, some of which have made their way into the newspapers, indicating that they are comparing the outturn figures for the budget with the planned figures. As a former Defence Minister, he will know that that is not an appropriate basis for comparison.

Harry Cohen: When the Chancellor handed out a lot of money on Monday, he accompanied it with public service agreements, independent audit, statutory inspection regimes and tough policies for managements that fail. As the Ministry of Defence has wasted money on the rifle and the Army radio and is overspending on countless other projects, why is it exempt from those tough new inspection, audit and management failure regimes?

Geoff Hoon: The Ministry of Defence is not exempt from those techniques. Indeed, as I said in my statement, we are setting out on yet a further round of very tough efficiency arrangements. I hope that they will be more satisfactory than in the past, as they will deal with outputs and will therefore look at the ways in which we deliver military capability, rather than the amount of cash that goes in in the first place. That will have a very clear advantage not only for the Department at the centre, but for those responsible for the various devolved budgets, as it will mean that they get the benefit of any savings that they have generated through efficiency. I think that that is a much more sensible way of proceeding.
	I must argue against my hon. Friend's suggestion that we have wasted money on the rifle or, indeed, on the radio. The current programme on improving the communications system available to the armed forces is proceeding very successfully.

Nicholas Soames: I welcome the right hon. Gentleman's announcement that he has secured new money for defence. As my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) said, that is wholly to be welcomed. While the new chapter is extremely sensible in taking forward much of the work that needs to be done following 11 September, does he agree that it is important in this matter as in any other not to be too deluded by fashion at any one time or by the wonders of defence technology, and that at the end of the day there will be no replacement, particularly in the British armed forces, for basic grunt soldiering? Will he also assure the House that, when he comes to consider the future size, shape and structure of the armed forces—which clearly need to be adjusted—and the difficult decisions that he is going to have to take on the future of the main battle tank, on the structure of the Royal Armoured Corps and on Eurofighter numbers, nothing will interfere with the continuing, astonishingly brilliant achievements of the British armed forces of all three services? That success is achieved by the most demanding and rigorous training, which enables them to do what they do for us overseas in much easier circumstances than might exist for other people.
	May I also ask the Secretary of State to examine the whole question of defence diplomacy again? Does he agree that it is one of the golden assets offered by this country, and that as many foreigners as want to should have the opportunity to train at our great military institutions—the staff college, the Royal College of Defence Studies, Sandhurst, Cranwell, Dartmouth and all the others? This facility is a great plus for Britain and a great driver for our interests overseas.

Geoff Hoon: I am extremely grateful to the hon. Gentleman for his observations, particularly those about the people involved in the armed forces, who, as he rightly said, do a tremendous job. I ended my statement with a proper tribute to the effort that they make, and I always strongly insist that that should include the civil servants in the Department, who perform magnificently alongside members of the armed forces.
	The hon. Gentleman is also right to suggest that there is a risk, when producing a White Paper of this kind, that we simply reorganise our armed forces to fight the last battle. The most important theme of the strategic defence review was that we should have flexibility, and that we should have the kinds of armed forces and equipment that we judge will be necessary over the longer term. Adding technology to that, particularly the kinds of technology that are dealt with in the White Paper, is a crucial part of it, but it should not be—and will not be—at the expense of previous commitments that we have entered into and recognise that we have to deal with.
	On defence diplomacy, I could not agree more with the hon. Gentleman. In the course of my travels—I have recently come back from Russia, for example—I am always enormously impressed by the way in which the expertise of our armed forces is welcomed, supported and sustained in other countries. In Russia, co-operation between the Royal Navy and the Russian navy has gone on, even in some extraordinarily sensitive and difficult times, and the men and women of our armed forces have continued to work with their opposite numbers in a way that can only enhance the United Kingdom's standing.

David Cairns: I welcome my right hon. Friend's statement today, especially the centrality that the review gives to conflict prevention and defence diplomacy. Does he agree that money and time spent on working with democratic Governments throughout the world, and with moderate regimes in places such as the middle east, to tackle the root causes of terrorism and to identify embryonic terrorist cells and deal with them in situ represent an investment, and that that is money well spent? What discussions is my right hon. Friend having with other arms of the British Government—the Department for International Development and the Foreign and Commonwealth Office, for example—and with our allies to ensure that the vital work of conflict prevention has a central role in the years ahead?

Geoff Hoon: My hon. Friend is absolutely right, and he makes a number of extremely good points. Conflict prevention involves a number of different Departments working together, and it is a characteristic of the threats facing international security that they cannot simply be addressed by the armed forces; we have to ensure that we engage other Departments. Perhaps the most recent illustration of that involves the difficulties undoubtedly being experienced today in Nepal. We are working closely with the Department for International Development to ensure that there is a coherent approach to the problems of that country.
	I would, however, emphasise that one of the lessons that we must learn from the appalling events of 11 September is that we cannot necessarily afford to ignore threats to our security simply because they appear to be in far-off countries and do not immediately threaten our interests. The one lesson, above all others, that I have learned from the events of 11 September is that we cannot simply put out of mind appalling regimes of the kind that we saw in Afghanistan on the basis that they are doing damage to the local population but may not be a threat to us. Globalisation means that that threat to us can occur very sharply, and in a very dangerous way.

Peter Viggers: Does the Secretary of State agree that the weakest link in our entire defence array is defence medical services, in which there are now shortfalls of as much as 75 per cent. in certain key faculties? He will know that this is not just a constituency interest for me, but one that involves defences generally. Our armed forces have not faced heavy casualties recently, but if we wait to reconstruct defence medical services until there are heavy casualties, it will be too late. Will the right hon. Gentleman look again at the whole of defence medical services? Will he also recognise that it will not be possible to reconstruct and improve them unless a proper training centre is available to improve esprit de corps, linked to the hospital ships and to the deployment of field ambulances, and that that should, of course, be the Royal hospital Haslar?

Geoff Hoon: I was about to agree with everything that the hon. Gentleman said. I certainly agree that there is still significant room for improvement in defence medical services. There has been some modest improvement recently, but we inherited a dreadful situation, which I am determined to tackle and get right. I believe that we have the right kinds of plans in hand to do that, and I certainly do not want our armed forces to be deployed without appropriate medical support.

Malcolm Savidge: I welcome my right hon. Friend's statement and the new chapter. Given the immense difficulties of ensuring homeland security against the threat of smuggled terrorist weapons of mass destruction, does he agree that, alongside the measures that he has outlined, there is an urgent need for us to strengthen international co-operation and treaties on non-proliferation?

Geoff Hoon: My hon. Friend is absolutely right. The Government put a great deal of effort into ensuring the success of non-proliferation agreements. Equally, however, it is my job, on behalf of the country, to look at situations that could arise in which those efforts could fail. Without being pessimistic about this, we need to have the right plans in place to be able to deal with the prospect of failure. That is why, while emphasising the importance of improving the co-ordination between our armed forces, in terms of their playing a part in defending the territory of the United Kingdom, I equally emphasise that that responsibility rightly lies with our Department for homeland defence, which is known as the Home Office.

Mike Hancock: I congratulate the Secretary of State on his statement to the House today. I welcome much of it, particularly the part relating to unmanned air vehicles. Will sufficient resources be devoted to the process of speeding up their development from a reconnaissance vehicle to an attack weapon, so as to achieve that quickly? Four times this afternoon, the Secretary of State has stressed that the new money will be spread over a five-year period. Much of what is required in the new chapter, however, needs money fairly quickly. I should be grateful if he would give an assurance to the House that the resources to carry out those developments that are needed speedily will be contained in the money that is available, and that we shall not have to resort to implementing cuts in the nation's existing defence commitments.

Geoff Hoon: So far as UAVs are concerned, part of the work that we would do would involve looking at the extent to which they require that offensive capability, as well as the reconnaissance aspect that they already enjoy. So far as any earlier spending is concerned, I would draw to the hon. Gentleman's attention this paragraph in my statement:
	"Further significant resources will be made available during the current financial year to enable us to manage the pressure arising from the high levels of activity in which we are currently engaged."

Hugh Bayley: I am prompted by the hon. Member for Gosport (Mr. Viggers) to remind my right hon. Friend that there is already a defence medical services training establishment for reservists at Strensall, on the outskirts of York. I went there recently, and observed an exercise in which an entire district general hospital, staffed by reservists, was created in a weekend. I welcome the White Paper, especially the section on international organisations. My right hon. Friend knows that the G8 action plan on Africa gives a strong commitment over the next 12 months to making progress on conflict prevention there, and sees, in particular, a role for regional defence forces.

Mr. Deputy Speaker: Order. The hon. Gentleman knows that we must make progress, as the afternoon is crowded with business. I do not want a statement; I want a question.

Hugh Bayley: Will resources be provided for staff training of African soldiers so that they can undertake their own peacekeeping?

Geoff Hoon: A great deal of effort is made in that regard. We have already had questions on defence diplomacy, and part of the excellent work done by our armed forces is to ensure that we offer such training and assistance wherever possible, including specifically in Africa.

Julian Lewis: We know that the extra chapter has been called forth by the events of 11 September. One of the most embarrassing aspects of that is the fact that the leader of al-Qaeda, many of al-Qaeda's financial resources and the majority of its personnel who committed suicide and killed so many people on 11 September come not from Afghanistan, but from Saudi Arabia. What steps is the Secretary of State able to take to ensure that we maximise co-operation with our defence counterparts in Saudi Arabia? If they are left out of the picture, all the attacks in places such as Afghanistan, and even Iraq, will surely be insufficient to our ends.

Geoff Hoon: One of the beneficial consequences of 11 September, if I may put it that way, is the enormous improvement in co-operation right around the world, including with Saudi Arabia. As I said earlier, I have just come back from Russia. The co-operation with that country since 11 September could not have been imagined on 10 September.
	That is a consequence of those appalling events that we need to continue to build on, so I can give the hon. Gentleman the assurance that we are working with Saudi Arabia and other countries that supplied nationals. We should not be too complacent: I still find it astonishing that United Kingdom citizens were involved and were prepared to go to Afghanistan and participate in terrorist operations. We simply cannot afford to point the finger at any other given country when we have similar problems.

Robert Key: This is a significant new chapter and I welcome it. The devil is in the detail, and understandably the detail is not in the chapter. Will the Secretary of State assure me that due consideration has been given to the pressure on the Army training estates, particularly the defence nuclear, biological and chemical centre at Winterbourne in Wiltshire, the NBC Regiment and Winterbourne's neighbour, Porton Down?

Geoff Hoon: I can give that assurance but, as I said in my statement, we must work on those areas simply because we recognise the growing threat, which facilities such as Winterbourne Gunner and Porton Down in particular will give us the capability to deal with.

Douglas Hogg: Does the right hon. Gentleman accept that, in combating terrorism, it is important to act within international and domestic law? Does he accept that, usually, that will involve seeking explicit authority from the United Nations? Does he accept also that he should generally come to the House for express authority for the deployment of troops overseas? Does he accept, finally, that we need to define in international law the rights of those who are alleged to be terrorists and who are held overseas?

Geoff Hoon: Let me make it clear to the right hon. and learned Gentleman, although I am sure it is not necessary, that international and domestic law involve recourse to the UN for specific authority, but that is not, as I think he suggested, an absolute precondition. As he well knows, there are many circumstances in which it is perfectly proper to take international action without specific recourse to the UN. The law relating to self-defence is an obvious example of that.

Pete Wishart: Will the Secretary of State please explain how putting the defence fire service in the private sector will improve the effectiveness and security of our defence personnel? He is of course aware that when the Minister of State for Defence was asked on Monday how many positive representations he has had on the issue, he candidly and honestly replied none. In the light of what has been said today, will the Secretary of State reconsider this daft privatisation?

Geoff Hoon: No decision has been taken on that, and an announcement will be made once a decision has been taken. Certainly, I have taken the hon. Gentleman's representations into account and, indeed, those made by others on the subject.

Patrick Mercer: Whatever Army numbers are—we can argue about what they should be—the fact remains that they are still about 7,000 short. Indeed, the document says that
	"fully manned and sustainable manpower structures are proving elusive."
	The fact also remains, however, that certain regiments and battalions are overmanned and fully sustainable. Will the Secretary of State give an assurance that those units will be used in the roles fulfilled by the Parachute Regiment and the Royal Marines so that a two-tier Army does not emerge and dwindling morale is restored?

Geoff Hoon: We have had this conversation before. I do not accept that there is dwindling morale, but I certainly assure the hon. Gentleman that part of the implication of what I have said is that we must ensure that there is a wider, rapidly deployable capability available to us. By implication, therefore, I agree with at least part of what he says. We have made no secret of the need to make up that shortfall, but he knows from his considerable experience that the real pressures on the armed forces are in those areas that I mentioned—key enablers and the kind of people that we have to deploy time after time when we are engaged in a series of operations around the world. We need to devote specific resources to that area to improve our capabilities.

Michael Jack: Will the Secretary of State confirm that nothing in this welcome new chapter will change his commitment to buying all 232 Eurofighters? Will he also tell me whether the European-based successor to the future offensive air system programme will be fully engaged in developing unmanned air vehicle technology to the advantage of our British aerospace industry?

Geoff Hoon: I can absolutely confirm to the right hon. Gentleman that nothing in the new chapter will affect our commitment in relation to the Eurofighter. The Prime Minister made that clear to him very recently, I believe, and I am happy to repeat it. Certainly, our work on UAVs will inform considerably our thoughts on FOAS and how we take it forward. This and many other countries must have that important discussion on the aircraft that we shall have in future, and I am delighted to say that we are leading the way with that.

Julian Brazier: I welcome most of today's announcement, including consideration of the volunteer reserves, but has the Secretary of State at all examined the model of the American air national guard? It provides all America's continental air defence, and did so effectively when patrolling after 11 September, although our own Air Force has just withdrawn its last regular squadron from the London area.

Geoff Hoon: The issue is obviously to ensure that we have the right capabilities available to deal with potential threats. As I said in my statement, we have quick-reaction aircraft available. The statement set out the circumstances in which we intend to extend the availability of airfields for that purpose and ensure that we have appropriate protection in place across the country. That has undoubtedly been improved since 11 September and we must continue that improvement.

Hugh Robertson: In his statement, the Secretary of State trailed the development of a new air-transportable medium-weight armoured vehicle. Presumably, it will fall mid-way between the current main battle tank and the light armoured CVR(T), or combat vehicle reconnaissance (tracked). That is much to be welcomed, but given that the Ministry of Defence has clearly identified it as a gap in our capability, will he tell the House when it might come on stream and what we are doing to plug that gap in the meantime?

Geoff Hoon: As a consequence of the events of 11 September and, specifically, the operations that we have had to conduct at a great distance, we recognise that there may be a greater need for air-transportable medium- weight equipment. We are working on that. I do not anticipate a gap today, but we recognise that there may be such a requirement for the future.

Points of Order

Peter Pike: On a point of order, Mr. Deputy Speaker. I rarely raise points of order, but I must seek your guidance. Several issues were covered in this afternoon's statement by my right hon. Friend the Deputy Prime Minister, but empty houses and the Pathfinder project, which are crucial to my constituency and the constituencies of many of my hon. Friends, were not dealt with, although they formed an important part of the statement. Is there any way for us to indicate our concerns to the Chair during statements? I realise that those in the Chair always have a difficult job and that not everyone can be called, but can we ensure that all parts of statements are covered?

Neil Turner: Further to that point of order, Mr. Deputy Speaker. Only two Members representing constituencies in the north-west were called to ask questions, although we have a huge problem in the north-west. I think that the Chamber should be seen to reflect the whole nation, not just parts of the south-east and East Anglia. I realise that you are in a difficult position in having to ensure that all points are covered properly, but I would be grateful if you could tell us how those of us who represent areas beyond the south-east can make our points in regard to a statement by the Deputy Prime Minister that covers the whole of England.

Mr. Deputy Speaker: Experience teaches that Members must always be extremely selective in making points relating to a statement of that kind, but I think I heard the Deputy Prime Minister describe his statement almost as an interim statement, suggesting that there was more to come. Even between today's statement and the statement that is promised, there may be plenty of opportunities for Members who are concerned about the subject to seek Mr. Speaker's approval for Adjournment debates. Several more hours are now available for such debates in the calendar of the House.

Geoffrey Clifton-Brown: On a point of order, Mr. Deputy Speaker, of which I have given notice to Mr. Speaker.
	Item 6 in the section of the Order Paper entitled "Remaining Orders and Notices" mentions a statutory instrument,
	"the Local Government Finance (England) Special Grant Report (No. 105) . . . on Invest to Save Budget Round 4 Projects and Local Government On-Line".
	At the start of business today, that statutory instrument had not even been printed, and it was not on the internet. It was not on the departmental internet, or on HMSO's website.
	The statutory instrument is not a matter of urgency, yet it has been selected for debate in the Second Standing Committee on Delegated Legislation at 4.30 pm on Monday. We, the official Opposition, still have no idea of its contents. Indeed, had it not been for the excellent Order Paper of the House, we would not even have known of its existence. Given that it concerns putting Government information online, it seems something of a mistake not to put it on the internet.
	I must add that this is not the first time we have had this problem with the Deputy Prime Minister's Department. When discussing numerous statutory instruments, we have found that vital information on, for example, environmental impact and on important maps has not been placed in the Library.
	I have raised these points consistently in the relevant Committee. We expect better from it—or is this an attempt to stop Government information being disseminated and, above all, to stop the House performing its scrutiny role properly? I consider it a gross discourtesy to the House.

Mr. Deputy Speaker: I thank the hon. Gentleman for giving notice of his important point of order. I note that the statutory instrument was laid before the House on 9 July. It follows that there should be at least one copy in the Library. If, as the hon. Gentleman says, a supply of fully printed copies is not yet available in the Vote Office nine days after the laying of the document, that is indeed most regrettable. I hope that the hon. Gentleman's point will be noted, and that action will be taken as quickly as possible to resolve the problem.

Julian Lewis: On a point of order, Mr. Deputy Speaker. I seek your guidance on a matter relating to the Home Energy Conservation Bill, which, as Mr. Speaker's Office will be well aware, was pulled suddenly. It was due to be debated tomorrow.
	There is massive interest in the Bill out in the country. By sheer coincidence, a Conservative Member has tabled an identical Bill—the Home Energy Conservation (No. 2) Bill—which is rather low in the batting order for tomorrow. Can you advise the House, Mr. Deputy Speaker, and advise all who are so concerned about the fact that the Labour Member has pulled his Bill, whether the Conservative version of what is in effect the same Bill could be moved up the batting order, and whether the Government have notified you that they would be willing for that to be done?

Mr. Deputy Speaker: It was the promoter of the Bill who decided to withdraw it, and the Chair has no control over that. As the hon. Gentleman says, another Bill of a similar nature then appeared. That Bill, I am afraid, must take its appointed place, and neither the Chair nor anyone else has power to change the order. We must wait and see what happens tomorrow.

Proceeds of Crime Bill [Money]

Queen's recommendation having been signified—

Bob Ainsworth: I beg to move,
	That, for the purpose of any Act resulting from the Proceeds of Crime Bill, it is expedient to authorise the payment out of money provided by Parliament of—
	(a) the remuneration of the Director and staff of the Assets Recovery Agency;
	(b) any expenses incurred by the Director or any of the staff of the Agency in the exercise of his or their functions.
	The motion arises from technical amendments made to the Bill in another place to ensure the status of the Assets Recovery Agency as a non-ministerial department. The money motion passed by the House on 30 October enabled any expenditure incurred by any Minister of the Crown under the legislation to be met from money provided by Parliament. The amendments made in the other place, however, provide for the director's expenses to be met directly from money provided by Parliament, rather than through the Secretary of State. This motion is intended to ensure that that will be possible.

Douglas Hogg: I am still a little perplexed about what event in the other place triggered the motion, but I think the Minister can help us on a number of points. First, what is the anticipated full-year cost of the agency? Secondly, when does the Minister expect all the necessary staff to have been recruited? Thirdly, how many will there be? Fourthly, can the Minister give an undertaking that there will be no order triggering commencement of implementation of the relevant parts of the Bill until all staff are in place and fully trained?

Bob Ainsworth: The right hon. and learned Gentleman has asked for details of when we will be able to implement the various powers, and when we will be able to recruit staff. We have not even secured Royal Assent—which is, in fact, being delayed by some substantive issues with which the right hon. and learned Gentleman's own party appears to disagree. I therefore consider his questions a little out of order.
	We have some estimates of the number of staff envisaged for the agency. It is estimated that eventually there will be about 100. We expect the agency to be able, effectively, to recover more than its costs by recovering the proceeds of crime.

Michael Mates: It is interesting that the Minister still sticks to the line that he will recruit about 100 people. Two or three days ago, an advertisement appeared in the press seeking applications for the post of director of the agency. According to the advertisement, he would be responsible for a staff of between 150 and 200.
	I had intended to congratulate the Minister on noting what was said in the report of the Select Committee on Northern Ireland Affairs. We said that we feared that the agency might be understaffed. Surely the Minister's officials are not advertising for more people than the Minister is prepared to approve? Which figure is correct, 100 or 200?

Bob Ainsworth: The figure is expected to be something in excess of 100. We have not settled on an exact figure. We have advertised for a director, and there has been considerable discussion—as the hon. Gentleman knows, for he has been party to it; I hope he is happy with the conduct of that discussion—about the number of staff who might be needed to deal with Northern Ireland matters. It is indeed an important matter, which has not been finally settled. I hope we will be able to satisfy the hon. Gentleman that not just the staff covering the rest of the United Kingdom but the staff in Northern Ireland will be equal to their task. I do not think there will be any real point of controversy between us.
	As I have said, we hope eventually substantially to increase the moneys recovered from the proceeds of crime, and thus more than recover any costs of the agency. If we secure all-party support and obtain Royal Assent before the summer recess, we shall be able to do that much sooner than we could have otherwise.
	Question put and agreed to.

Proceeds of Crime Bill (Programme) (No. 3)

Motion made, and Question put forthwith, pursuant to Order [28 June 2001],
	That the following provisions shall apply to the Proceeds of Crime Bill for the purpose of supplementing the Orders of 30th October 2001 and 26th February 2002:

Consideration of Lords Amendments

1. Proceedings on Consideration of Lords Amendments to the Bill shall (so far as not previously concluded) be brought to a conclusion at Seven o'clock on the day on which those proceedings are commenced.

Subsequent stages

2. The proceedings on any further Message from the Lords on the Bill shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—[Mr. Heppell.]
	Question agreed to.

Orders of the Day
	 — 
	Proceeds of Crime Bill

[Relevant documents: Second Report from the Northern Ireland Affairs Committee, Session 2001–02, on the financing of terrorism in Northern Ireland: interim report on the Proceeds of Crime Bill, HC 628, and Fourth Report, Session 2001–02, on the financing of terrorism in Northern Ireland, HC 978-I.]
	Lords amendments considered.

Mr. Deputy Speaker: I must draw the attention of the House to the fact that privilege is involved in Lords amendments Nos. 9, 47, 78, 166 and 276, which are to be considered today. If the House agrees to those Lords amendments, I shall ensure that the appropriate entry be made in the Journal.

Clause 1
	 — 
	The Agency and its Director

Lords amendment: No. 1.

Bob Ainsworth: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendments Nos. 2, 3, 34 to 37, 101 to 104, 178, 259, 260, 273 to 277, 317, 318 and 320.

Bob Ainsworth: These amendments make detailed technical changes to the provisions that establish the Assets Recovery Agency. They also respond to concerns expressed by the Select Committee on Northern Ireland Affairs about the personal safety of staff working in this area.
	Lords amendments Nos. 1 and 273 to 277 make some minor amendments to clause 1 and schedule 1. Those confirm the agency's status as a non-ministerial department and the director of the agency as a civil servant of the state.
	Lords amendments Nos. 2, 3, 34 to 37, 101 to 104 and 320 clarify the provisions on the accreditation of financial investigators who will have access to the restraint powers under parts 2 and 4 and the investigative powers under part 8. The amendments put it beyond doubt that the director can provide different classes of accreditation for different purposes, rather than a single all-encompassing award.
	Lords amendments Nos. 178, 317 and 318 will ensure that police officers can be seconded to the new agency on normal central service terms. Such officers will, however, be prohibited from exercising the functions of the director in relation to part 5.
	Lords amendments Nos. 259 and 260 respond to the helpful comments of the Northern Ireland Affairs Committee about the importance of protecting those working for the new agency and those undertaking similar work in Scotland. The amendments will enable relevant staff to use pseudonyms to protect their identities.

Michael Mates: At the risk of this becoming a bit of a love-in, I thank the Minister for listening to what the Northern Ireland Affairs Committee said. We examined the matter carefully. It is one of the all too rare examples of Government listening to Parliament, for which the whole of my Committee is grateful.

Bob Ainsworth: I thank the hon. Gentleman for his thanks. He came to the House, put his point of view and argued his case well. I said at that time that we would take on board the points that had been made and try to respond to them. He had a concern. I am pleased that we have been able to do exactly that and that he is satisfied with the outcome.

Ian Davidson: Can the Minister give me an assurance that these are all genuine improvements and that he has not gone all soft and soggy on us?

Bob Ainsworth: As I have said, the overwhelming majority of the amendments are technical. I hope my hon. Friend would accept that there is a specific issue—the safety of people working in the environment of Northern Ireland. The ability of people to maintain some anonymity by the use of pseudonyms will help both to recruit people to the agency and to make it more effective. I would have thought that there was no way that could be interpreted as being soft and soggy.

Martin Smyth: As the Minister will be aware, we appreciate his response to the Northern Ireland Affairs Committee, but may I press him again on the numbers? In our judgment, unless this goes off with a real bang—I do not mean the bangs that we have been used to for far too long—we will be in difficulties. We are looking forward to the recruitment increase not all being around London: we hope that there will be more than 15 extra staff in Northern Ireland. There is a less difficult problem in the Republic, where over 100 staff are involved. We must have the number of people in post to deal with the problem now, rather than hoping that the number will grow and thereby losing the momentum.

Bob Ainsworth: I agree with the hon. Gentleman that it is important that we try to get the agency off to a flying start and that there is a step change in this area of law enforcement. Obviously, that has particular resonance in the environment of Northern Ireland, but it applies across the country. I ask him to accept that we are not wholly relying on the agency to achieve that step change: we need to step up our activity and capability with regard to confiscation across the piece. We have been able to do many things without the legislation. For example, we have substantially increased the number of financial investigators to police forces. Our asset recovery strategy is already starting to show some results. The amount of assets recovered from criminal activity has increased over time.
	We are looking to the agency to provide the sort of expertise that will be necessary to use some of the powers, to take over the complicated confiscation cases that will be too much for individual crown prosecution services or other law enforcement agencies, and to operate civil recovery and other powers which will be exclusive to the agency.
	The hon. Gentleman is right. If the staff of the agency are the only people involved in the step change—the culture change that is needed on confiscation of criminal assets and the proceeds of crime—we will not get to where we badly need to be. A lot more people from all kinds of agencies must be involved. We are working on getting the assets recovery strategy up and running ahead of the agency's establishment, to ensure that we have a substantial start and are not seen to be ineffective for any period.
	I hope that I have been able to satisfy hon. Members. I am extremely grateful for the support for what we have been able to do in Northern Ireland. I am sure that the debate on the number of officers in the Northern Ireland Office will continue and remain under scrutiny by everyone who is involved in work in the Province. Obviously, we will listen to that continuing debate.

Nick Hawkins: As the Minister has said, this group of amendments covers a fair number of issues but many are not major issues. I have a couple of specific questions, but Conservative Members greatly welcome the constructive way in which the Minister and his former Front-Bench colleague, the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), approached the matter through many weeks in Committee. We welcome the Under-Secretary of State, Scotland Office, who has taken over from the right hon. Gentleman.
	Can the Minister indicate whether there is any specific significance in the addition of amendment No. 320 relating to the Financial Services and Markets Act 2000, and whether the fact that, under a couple of amendments in this group, everything will be referred to the Minister for the civil service has any particular significance? I wondered whether that was as a result of any disagreement among Ministers and whether the Minister for the civil service felt frozen out. No doubt the Minister will say that it is all part of joined-up government.
	My hon. Friend the Member for East Hampshire (Mr. Mates) has already referred to the work of the Northern Ireland Affairs Committee. I am glad that, in line with the spirit that has characterised our debates in Committee, the Minister paid tribute to the work of the Committee. I hope that he will also pay tribute to Lord Brooke of Sutton Mandeville, a distinguished former Secretary of State for Northern Ireland, formerly the right hon. Member for Cities of London and Westminster. As the Minister will be aware, the Government amendments dealing with pseudonyms were based on amendments originally tabled by Lord Brooke of Sutton Mandeville, as it were on behalf of the Select Committee. I hope that the Minister will try to reflect the tenor of the debates between my noble Friend Lord Brooke and his noble Friend Lord Rooker in another place.
	The debate on this group of amendments will be relatively short. Some substantial questions will arise on later groups, and I do not want to delay the House now, but may I ask the Minister, in line with the constructive spirit in which we have approached the Bill, to confirm that the Prime Minister must have been misinformed when he suggested yesterday that the Conservative party had opposed it? I ask him to refer specifically to what my right hon. Friend the Member for West Dorset (Mr. Letwin) said when the Bill started its progress many months ago:
	"We on the Conservative Benches share the Government's desire to deprive people who profit hugely from very evil acts, but who cannot directly be related to some of those evil acts, of the ill-gotten gains on which they subsist. I suspect that that is common ground among members of all parties . . . I shall not recommend that my hon. Friends oppose the Bill."—[Official Report, 30 October 2001; Vol. 373, c. 767.]
	I hope that the Minister will be able to confirm that that has been the position of the Conservative party on the Bill throughout.

Bob Ainsworth: On the substance of the amendments, the hon. Member for Surrey Heath (Mr. Hawkins) will know that the Bill is very complex and has many strands, so many Departments are involved in different ways. He should not be surprised or look for little arguments that do not exist. The blunt answer to him is yes, he is right: this is about joined-up government. That is what we believe in, and that is what we try to carry out, although we do not always do so successfully; I should have thought that his party, too, had tried to do so when it was in power.
	The Financial Services and Markets Act 2000 has to be amended to assure the funding for accredited financial investigators working for the Financial Services Authority. The role for the Minister for the civil service flows directly from the change of status, because the director comes under a non-ministerial department rather than receiving his funding directly from the Home Secretary. There is no issue here that the hon. Gentleman should not be able to understand, and he should not surmise that someone's nose has been put out of joint or that that has subsequently had to be put right. He is far too suspicious.
	As for the hon. Gentleman's concerns about what the Prime Minister said yesterday, let me read the Hansard report to him so that he can hear exactly what was said—[Interruption.] I am glad that the hon. Gentleman has it with him, but for the sake of the record I shall read it out:
	"However, if he is serious in his commitment to the fight against crime, there is the Proceeds of Crime Bill that is now before the other House. According to the police, that measure is essential to deal with drug dealers and others who can secrete there assets. I ask him now to reverse the position of the Conservative party and to support what is an essential measure in the fight against crime.—[Official Report, 17 July 2002; Vol. 389, c. 279.]

Dominic Grieve: rose—

Bob Ainsworth: Will the hon. Gentleman remain in his seat for a minute?
	We shall see in the course of this afternoon what the Conservatives will do. Three substantive groups of amendments will come before the House today, and we shall see whether the Leader of the Opposition and his right hon. and hon. Friends do what the Prime Minister asked. We shall see what happens between now and 7 o'clock—and I hope that we will be pleasantly surprised.

Dominic Grieve: If that had been the only occasion on which the Prime Minister had brought forth such bizarre utterances, which showed a cognitive deficit on his part, I would not be too troubled. But there has been a series of repetitions over a number of Prime Minister's Question Times. As the hon. Gentleman knows, we indicated our support for the measure on Second and Third Reading—but this afternoon we shall continue our task as an Opposition, which is to try to improve the Bill.

Bob Ainsworth: Throughout the passage of the Bill I have paid tribute to the hon. Gentleman for some of the helpful and constructive comments that he has made about it—but not all his comments fell into that category. Between now and 7 o'clock we have to consider three sets of wrecking amendments, which would do substantial damage to the Bill, and which were moved and supported by the hon. Gentleman's colleagues in another place. Within the next couple of hours we shall see whether the Conservative party will respond to the Prime Minister's request, support the Bill, and give the forces of law and order an effective tool to use.
	Lords amendment agreed to.
	Lords amendments Nos. 2 and 3 agreed to.

Clause 6
	 — 
	Making of order

Lords amendment: No. 4.

Bob Ainsworth: I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may take Lords amendments Nos. 43 and 73 and the Government motions to disagree thereto.

Bob Ainsworth: We now come to the first serious test of whether the Conservatives are trying to do serious damage to the Bill, or whether they intend to support the measures needed to combat crime and remove its profits. I look forward to that.
	This group of amendments returns us to a theme that will by now be familiar to the House—the question of mandatory versus discretionary confiscation procedures. It has been discussed at length in Committee in both Houses and on Report in another place; I refer the House to the Hansard reports for 4 December 2001, and 22 April and 25 June 2002.
	It is not clear to us what the exact effect of this group of Opposition amendments would be—[Interruption.] The amendments would do serious damage, as I shall explain, and would reverse the direction in which policy in this area has been travelling for a long time, including under the guidance of Conservative Governments.
	There are two schools of thought about what is being proposed. The first is that the amendments would give the courts the discretion not to mount a confiscation hearing at all. The second is that the amendments would require the court to confiscate the benefit from the defendant's particular criminal conduct, at the request of the director or the prosecutor, but would empower it not to confiscate the benefit of the defendant's general criminal conduct.
	Either way, we are wholly opposed to these amendments. Replacing a mandatory procedure with a discretionary procedure would drive a coach and horses through the basic policy in the Bill. The amendments would reverse a gradual historical development in the direction of an increasingly mandatory regime, not a less mandatory one.
	Confiscation in England and Wales has always had a strong mandatory element. Under the Drug Trafficking Offences Act 1986 the court was required to make a confiscation order in every case. The assumptions procedure under the Act was discretionary, but was replaced with a mandatory assumptions procedure by the Criminal Justice Act 1993.
	The non-drug confiscation legislation was originally discretionary—

Douglas Hogg: rose—

Bob Ainsworth: I shall give way to the right hon. and learned Gentleman in a moment.
	That was changed, and the procedure was made mandatory by the Proceeds of Crime Act 1995.
	To emphasise the direction in which policy has been travelling, and before I give way to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), I shall read what Lord Hurd, as he now is, said during the passage of the 1986 Act:
	"the Crown court will in future be required to determine, in the case of every person convicted of a drug trafficking offence, whether he has benefited from drug trafficking and, if he has, to impose a confiscation order to deprive him of the entire proceeds of that trafficking . . . Therefore, we propose in clause 2 that courts should be able to assume that the whole of an offender's property, together with any assets which have passed through his hands in the previous five years, represent the proceeds of trafficking, except in so far as he shows otherwise."—[Official Report, 21 January 1986; Vol. 90, c. 243.]
	That shows the intention of the then Minister, way back in 1986.

Douglas Hogg: Will the Under-Secretary give way?

Bob Ainsworth: I shall give way to the right hon. and learned Gentleman in a moment, as I said I would.
	Some six years later, in making amendments, the Minister said:
	"During the six years in which the legislation has been in force, the courts have declined to apply the assumptions in a number of major cases, thereby placing the prosecution in the impossible position of being expected to prove matters in relation to the offender's property which are solely within his knowledge."—[Official Report, Standing Committee B, 8 June 1993; c. 76-77.]
	That shows clearly—

Douglas Hogg: rose—

Bob Ainsworth: The right hon. and learned Gentleman is very impatient.
	Those comments show clearly that the Conservative party recognised the need for a move towards a mandatory scheme. There is no evidence since that time of a huge abuse of power or of miscarriages of justice—quite the reverse. All the evidence shows that, despite such efforts, confiscation has been used a lot less than it ought to be. Given the problems that we face, there is therefore no reason for us to start heading in the opposite direction by softening the regime rather than toughening it up, which, in effect, is what the amendment proposes.

Douglas Hogg: The Under-Secretary criticises the Opposition for championing a discretionary power. Would he be good enough to look at clause 6(3)(b)? On doing so, he will discover that his own Bill gives the court discretionary power. If the prosecutor or the director does not make an application to the court, it will be for the court to decide. That is a discretionary power.

Bob Ainsworth: Exactly. We believe that the Bill as it stands contains sufficient safeguards to allow for the avoidance of injustices. Yes, it is for the prosecutor to decide whether it is appropriate to make an application, and if he thinks it inappropriate, he should not do so. Yes, in terms of the risk of a serious injustice, the court can effectively prevent an action from taking place. However, the existing mandatory system should continue, and should be toughened rather than loosened. We do not need to retreat from the direction in which we are travelling, given the continued existence of a very real problem.
	Perhaps Opposition Members think that the impact of such legislation has been profound up to now, or perhaps they can give instances of its being so draconian that it has led to injustices. However, I have seen no such evidence, and nor has such evidence been presented to the House during the Bill's passage.
	In effect, mandatory assumptions have been tested in court, so even if concerns exist about the Human Rights Act 1998 or the European convention on human rights, there is no particular reason why we should retreat from our current direction. In considering the mandatory application of assumptions in drug trafficking cases such as the Phillips v. United Kingdom case, which was decided on 5 July 2001, the Strasbourg court found that such applications are consistent with the convention. So I am not persuaded that there is a problem, or that the amendments would improve the Bill's effectiveness.
	Without the amendments, the Bill gives a clear definition of a criminal lifestyle. When criminals commit offences, they will know exactly what they are exposing themselves to in confiscation terms. The amendments would remove certainty, turn confiscation hearings into a lottery, and reverse the trend towards a mandatory regime that has continued for some time under both Labour and Conservative Governments. I do not believe that there is any justification for the amendments; indeed, they would do considerable damage to the Bill. I therefore ask the House to oppose them.

Dominic Grieve: I am grateful to the Under-Secretary for his kind remarks. He pointed out that we sought to improve the Bill in Committee and on Report, and I note with great pleasure that many of the tabled Lords amendments have in fact arisen from discussions in Committee that involved all parties, and which the Government undertook to look into further. I am pleased to have this opportunity to express my gratitude to the Under-Secretary for taking those discussions on board.
	However, on this matter I fear that there may be a continuing difference between us. In saying that, I should make clear my support for the Bill's confiscation provisions. Given that the Under-Secretary raised the issue earlier, I should also point out that, as an Opposition, it is our job to scrutinise legislation. That process, which we hope will lead to the best possible legislation, comes to a conclusion when Royal Assent is given. We do not have to suspend our judgment or our debate and get into a happy-clappy, mutually self-congratulatory moment before that happens. I shall welcome the Bill when it receives Royal Assent, but until then I shall continue a dialogue with the Under-Secretary and other Government members on how to ensure that it is in the best possible condition.
	We have indeed already discussed the question of whether there should be a discretionary or a mandatory component in initiating the confiscation procedure. As the Under-Secretary will remember, one intriguing point about the Bill was that, when it was first considered in Committee, it contained a discretionary regime for Scotland, but not for England and Wales. Apparently, that was due to an historical fact—but not one, I am bound to say, that appeared ever to have interfered whatsoever with the operation of previous Scottish legislation.
	The Under-Secretary has gone on at some length this afternoon about the previous regime under previous legislation. I accept that, but the point is that that legislation was in no way as wide ranging and draconian in its powers and consequences as this Bill.

Tom Harris: Is the hon. Gentleman aware that, under the discretionary regime, a mere £750,000 of drug dealers' assets were confiscated in Scotland in the past year? That is an indictment of the discretionary regime.

Dominic Grieve: The hon. Gentleman asks me to comment on an individual decision, but I cannot do so. What is clear—the Under-Secretary and I agreed on this point in Committee, in the light of the evidence—is that earlier regimes showed signs of having started with massive confiscations, only for them to tail off rapidly. I suspect that that is far more a reflection of a lack of will on the part of those concerned rather than of a lack of means. If it was possible to make such confiscations when the system was introduced, I find it difficult to understand why it stopped being possible.
	As the hon. Member for Glasgow, Cathcart (Mr. Harris) may know, I was involved with drug trafficking cases in my professional capacity, and I remember that there were some successes on the regime's introduction. However, one problem was that orders for confiscation were being made that proved impossible to enforce. The orders were there, but as it turned out, the amounts that the courts estimated as capable of being confiscated were simply never found. I do not know whether that was because they were secreted away, or because they never existed in the first place. However, in my view they have nothing to do with the question of having a mandatory or a discretionary regime.
	The discussion in the other place took place between extremely reasonable people, and I commend the reading of the report of the proceedings to the Minister and other hon. Members. What was envisaged was as small a final stopgap—to ensure that injustice did not occur—as could be devised, and that was the phrase "exceptional circumstances". What might constitute exceptional circumstances? It appears that one could become liable to a confiscation order for acts that, as the Minister knows, any right-thinking person would be amazed to learn came within the legislation. One example is the conviction on several occasions for not having a rear light on a pedal cycle. That would not normally be the signal to scrutinise someone for signs of a criminal lifestyle.
	However, it is because of such examples, and the absence of other safeguards—the Minister might wish to consider what other safeguards might be possible—that a residual right for a judge to stop the initiation of the process seems eminently sensible, and compatible with all our principles of justice and of common sense.

Douglas Hogg: If it is right to give the court power to initiate the process, it is also—almost by definition—right to give the court power not to proceed with the process.

Dominic Grieve: My right hon. and learned Friend is right, and that very point was made by Lord Carlisle of Bucklow in the other place. He expressed astonishment that given that the court had the discretion to initiate the process—and the Minister seemed apologetic when he had to accept that that existed—it should not have a residual power to stop it. The Minister clearly envisages that a judge might on occasion—notwithstanding the fact that a prosecutor did not wish to initiate the confiscation process—consider the case and say, "This is outrageous. The interests of justice demand confiscation." He is content to give judges that power. That is why it is bizarre that he has such distrust of the same judges to whom he is prepared to give that power that he will not give them the discretion to say that circumstances do not warrant initiating the confiscation process. That is the point at issue between us.
	In the other place, Lord Goldsmith said that the legislation would apply only to "inherently acquisitive offences". I am sure that that is the intention and I assume that, because prosecutors are people of integrity, good standing, benevolence and propriety, that is what will happen. However, the House must always have regard to the possibility that power may be abused. When we give power to bureaucrats, however well intentioned they appear, it is right to consider what safeguards we can introduce to ensure that abuse does not occur. The normal safeguard that a sensible Parliament introduces is a judicial discretion. I do not share the Minister's sudden distrust of judicial discretion, especially when, as in this case, it would be so circumscribed and limited.
	The Minister claimed that the amendment would wreck the purpose of the Bill. We will consider some amendments later that pose real difficulties, and I acknowledge that, but in this case the Minister is descending—I regret to say—to the sort of comments that the Prime Minister made. I do not know whether the Prime Minister was programmed by his spin doctors to make those comments—

Tom Harris: That is a stupid thing to say.

Dominic Grieve: The hon. Gentleman appears to be so well programmed that he tried to raise the issue as a bogus point of order yesterday. I greatly regretted that. I hope that we can continue to have a sensible discussion about the issue, and I hope that the Minister will accept the sincerity of our views. I am confident that the Bill would survive the amendment and operate perfectly, but it would do so with the safeguard that the amendment would provide against possible abuse.

Hugh Bayley: I am concerned that the amendment could be used to give protection not only to people who fail to illuminate the rear light of their bicycles, but to people convicted of much more serious crimes. The Minister will be aware that I would like to see the confiscation and restraint orders applied to people charged with, or convicted of, the new offences of international bribery and corruption in the Anti-Terrorism, Crime and Security Act 2001. I have written to him on that point.

Douglas Hogg: I may have misunderstood or misheard the hon. Gentleman, but did he say that the provisions should apply to someone charged but not convicted?

Hugh Bayley: The provision for confiscation applies only to those who are convicted, but the restraint orders can be applied at an earlier stage.
	If a UK citizen or company obtains a contract abroad as result of bribery, it is a crime under British law. Therefore, the benefits of that crime—the income derived from the contract—are the proceeds of crime and should be subject to restraint at the point of charging, or confiscation on conviction. If the House decides to disagree with the Lords amendment, is it the Government's intention that the Bill should be used in that way against those either charged or convicted of the new offences of international bribery and corruption?

Alistair Carmichael: Here we are again, going over well trodden ground. If the debate so far is any indication, it is not even very fertile ground. The words of the Minister filled me with sadness and disappointment in him. I had acquired tremendous respect for him in Committee, and on Report and Third Reading. To hear him describe the Lords amendment as a wrecking amendment beggars belief.

Tom Harris: It is a wrecking amendment.

Alistair Carmichael: Simply repeating that untruth does not make it true. It is an exceptionally modest amendment that is limited to exceptional circumstances. It would not give a general power of discretion to the court. The discretion would also only be exercised in circumstances in which a trial of some sort had occurred and the judge or sheriff in question was already familiar with the circumstances. In the event that the discretion was abused in the way warned of by Labour Members, it would be open to the prosecutor to remedy that on appeal. What constitutes exceptional circumstances would be easily capable of judicial definition.
	The hon. Member for Glasgow, Cathcart (Mr. Harris) earlier intervened to criticise the discretionary regime that has existed hitherto in Scotland. He said that it produced only a few cases, but he did not make it clear that no case that has been subject to the discretionary scheme in Scotland has been refused. He risks misrepresenting the position, and misleading the House, when he suggests that the discretionary system is the reason that few cases are brought in Scotland. He should consider instead the way in which the Crown Office has traditionally been structured and how it has operated, and the resources devoted to that office and to the police. He would improve the debate immensely if he concentrated on such matters instead of trying to misrepresent the current position.
	Regrettably, a recurring theme in the discussion of this Bill has been the fact that the Government have said that they will not trust the judges. That is very depressing, if true. Why have the Government said that? I accept that there are faults with the judiciary, but the proposals in the Bill are not the way to tackle the problems. They would be better addressed by looking at the way in which judges are appointed, and at how people who are not members of the Faculty of Advocates can work in the Court of Session as senators of the College of Justice. We should also bear in mind the people who are entering university to study law and begin the journey to judicial appointment. Picking away piecemeal at judicial discretion is no substitute for a proper and comprehensive overhaul.
	The Government may say that a degree of discretion is given already to the prosecutor in Scotland and to the director in England. I remind the House that both are arms of the Executive. Any discretion given to the Executive requires that a counter-balancing discretion be given to the judiciary. Power exercised by the Executive is always open to abuse. If proceedings are raised that are oppressive—and I defy the Minister to say that that cannot happen—it is surely vital that some balancing discretion is given to the judiciary to redress the matter.

Rob Marris: I note with interest what the hon. Gentleman has said about placing checks and balances on the power of the Executive, but is not judicial review precisely that? It is designed to redress any irrational or unreasonable exercise of discretion by the Executive.

Alistair Carmichael: My understanding is that the decision could not be reviewed. In Scotland, the decision to initiate proceedings would not be open to judicial review. However, I welcome the hon. Gentleman's suggestion that it is important that the judiciary should be able to place a check on the powers exercised by the forces of the state.
	If the Government reject the Lords amendments, a dangerous precedent will be set. The powers given to the different parts of the criminal justice system will be out of balance. My experience is that the system works best when people concentrate on their own jobs and do not try to second guess what others are going to do. Each part of the system must exercise an appropriate and responsible measure of power, but the power has to be given in the first place, and that is what the amendment would do.

Ian Davidson: This is a key debate on a key amendment. For the first time, the Tories are boldly attempting to water down some of the Bill's proposals. They endorse the Lords amendment, the effect of which would be to allow some criminals to keep their assets, who otherwise would have those assets seized.

Dominic Grieve: The amendment would do no such thing. Its purpose is to ensure that proceedings are not brought against people who have no assets that could be seized, and that they are not put through the process in the first place.

Ian Davidson: I accept what my hon. Friend the Minister said—that the Bill already contains enough safeguards to make sure that that did not happen. I shall say more about the danger posed by the amendment in a moment.
	We should remember that this is not an arcane or abstruse debate between lawyers. We are discussing how our decisions affect real people in the real community outside the House. We are talking about crime and drug abuse, about people making millions out of selling drugs to their victims, and about communities and lives being wrecked. We must make sure that that is at the forefront of our minds.
	It struck me that Conservative Members were protesting somewhat too much about their good intentions. It is clear that, as so often, the words of my right hon. Friend the Prime Minister struck them to the heart. What he said was absolutely true—and I am not slow to criticise my right hon. Friend when he disagrees with me and gets things wrong. However, what he said on this matter was absolutely correct, and I enjoyed seeing the Tories squirm.
	We were not far short of the mark when we described the Tories as the criminals' friends. They have consistently acted to water down the Bill, in a way that would allow some people to escape justice who otherwise would not. The only people in the Standing Committee less supportive of the police and criminal authorities were the nationalists, and that was because they did not attend, as they did not apply for membership of the Committee. Liberal Democrat, Tory and Labour Members were there for hours and hours, week after week, but not one nationalist took part.

Annabelle Ewing: rose—

Ian Davidson: I am glad to see one bob up now.

Annabelle Ewing: I thank the hon. Gentleman for giving way. He is probably not surprised that I should want to intervene on this fascinating matter, on which I think he is wasting the House's precious time. The hon. Gentleman should note that only three Labour Back Benchers from Scotland are participating in this important debate.

Mr. Deputy Speaker: Order. I have heard equal views on this matter, which is outside the scope of the amendment.

Ian Davidson: Having noted the absence of nationalists from the Standing Committee, I shall not refer to it again in this contribution.
	There is a difference between mandatory and discretionary powers, and there is a danger that giving courts the discretion to apply the measures set out in the Bill will result in something resembling a plea-bargaining process. A recent murder case in my constituency was downgraded to culpable homicide, and it is clear that that was part of a plea-bargaining process. Giving courts the discretion proposed in the amendment would lead to plea bargaining about whether sanctions such as confiscation should be applied.
	I do not want that to happen. It is true that some of us have less confidence than we should have in the judicial system, and that we want to restrict the judiciary's flexibility in these matters.
	I listened to the points made by the hon. Member for Orkney and Shetland (Mr. Carmichael) about reform of the judicial system, university admissions and all the rest of it—the doctrine of the unripe time: we should not change the system now; we should do it at some other time in some other way. Discussing access to university law studies as a means of reforming the judiciary seems too long term, even for the Liberals. We might have a Liberal Government in power by that time, but I doubt it. My constituents and I want action now on these matters. The clearest message that we can send is that we want to fetter the discretion of the judiciary; we want mandatory provisions.

Alistair Carmichael: I take the hon. Gentleman back to the parallel that he drew with plea bargaining. That has no bearing on the judiciary having a measure of discretion. Under the Bill, it is open to the prosecutor to decide not to take confiscation proceedings. That is where any plea bargaining between the prosecutor and the defence would come in. There is no safeguard against that, as the Bill stands.

Ian Davidson: I understand that, but we ought not to remove all discretion from the prosecutor. There is some merit in what the hon. Gentleman says, but I do not want to extend the discretion, lest it waters down the mandatory aspect.
	This is not an arcane debate about the law. It is about how the law impacts on real people, real lives and real communities, which we are sent to this place to represent. We are talking not about Jeffrey Archer or Jonathan Aitken, but about major league criminals. [Interruption.] All right, I concede that former Conservative Members were in a more major league than I have given them credit for.
	We can discuss whether the terms of the Bill should have applied to Jeffrey Archer, Jonathan Aitken or any other Conservative MP, present or future, who comes into that category, but we should bear in mind that we are dealing with major issues—life and death for our communities. I should like to see some stiffening and some support for the Bill from the Conservative Benches, rather than the mealy-mouthed self-justification that we have heard up to now.

Douglas Hogg: I rise to try to ensure that the House addresses the real possibility of an injustice. Unlike, I suspect, any other Member, I have been involved in litigation arising out of legislation such as the Bill. In the Republic of Ireland, the Criminal Assets Bureau legislation contains powers very similar to those contemplated in the Bill, and I have acted in the courts of Dublin on behalf of people who have been the subject of procedures against them, so I have a certain amount of professional experience of what can happen in such cases.
	That makes me cautious and anxious to identify areas where we can reinforce legal and civil rights. We should welcome the amendment from the other place. The Under-Secretary said that there were two interpretations of the effect of the amendment. The second one might be theoretically possible, but the first one is clearly the intended one, which is to give to the court the power to disapply the procedure in a limited number of circumstances.

Ian Lucas: Does the right hon. and learned Gentleman accept that the Bill as it stands, without the amendment, already gives the court a great deal of discretion—the very point that he made earlier in the debate?

Douglas Hogg: That is true, as far as it goes.
	I am in favour of giving the court the power to disapply the process. That is consistent with the framework of this part of the Bill. A careful analysis of clause 6 indicates that there are two areas in which the court already has an important discretion. The first is the one that I drew to the attention of the Under-Secretary.
	The initiating process provided under, I think, clause 6(3) arises in one of two circumstances. Either the Crown or the prosecutor applies for the process to start, or the Crown or the prosecutor does not and the court has an initiating power. At that point, the court has a discretion.
	But the court has a discretion otherwise in this part of the Bill. Under clause 6(6), in certain circumstances—for example, if a victim is taking recovery procedure—the obligation to take action under subsection (5) becomes not a duty, but a discretion. So already, within this part of the Bill, one finds two clear examples where the court has a discretion.
	If it be right to provide the court a discretion in the two circumstances that the Bill provides, what is the objection in principle to providing the court with a discretion in those circumstances where the Crown or the prosecutor applies to institute the process, but the court, for one reason or another, thinks it unfair to proceed?
	There are two points that reinforce in my mind the importance of that. Let us be clear that the decision of the Crown or the prosecutor to initiate the process might well be made at a very junior level. The House must not assume that such decisions will be made by the Director of Public Prosecutions in person, Mr. Calvert-Smith. They will not. They will probably be made by a relatively junior official. It is important that the court should have the power to put restrictions on a decision made at a fairly junior level, if the court considers that appropriate.
	The second point is that the process that arrives at the conclusion that a confiscation order is made is on the low standard of proof—the civil standard of proof, not the criminal standard of proof.

Tom Harris: The right hon. and learned Gentleman said that a court should be able to decide "for one reason or another" not to proceed. That phrase strikes fear and terror into my heart and it is one of the reasons that the amendment is wrong.

Douglas Hogg: In fact, I was advocating a looser power than that provided for in the Lords amendment. The Lords amendment confines the judicial discretion to exceptional circumstances. I have many criticisms to make of the judiciary from time to time; none the less, in this case I would give the judiciary a wider discretion than that contemplated in the Lords amendment.

Bob Ainsworth: The right hon. and learned Gentleman is right to say that he has a great deal of experience in practising in the courts. He has another kind of experience as well: he was a member of the previous Government in various capacities. It is perturbing that it has been said that the present Government fear the discretion of the judges. The right hon. and learned Gentleman will know that mandatory assumptions were applied not by this Government, but a long time ago. Can he can give us an insight into why it was considered necessary for those mandatory assumptions to be applied by the Government of which he was a member some years ago? Can he, because of his wide experience, give us any indication where an injustice has occurred since those mandatory assumptions have been in place?

Douglas Hogg: Basically, I am against mandatory sentences. Yesterday, I put to the Home Secretary a proposal that judges in murder cases should have the right to impose determinate sentences, not life sentences. I have always been extremely cautious about mandatory sentences, because I believe that they do not address the particular circumstances of individual cases.
	That general point, however, goes rather outwith the narrow point that I am making today, which is that in an area where the standard of proof is the relatively low one, and where the decision to trigger the process can be made at a relatively low level, the court should, in exceptional circumstances, have a power to stop the procedure. That seems to be consistent, not inconsistent, with the present framework of clause 6, and I very much hope that my hon. Friend the Member for Beaconsfield (Mr. Grieve) will press this matter to a Division.

Tom Harris: I start by disagreeing with my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson). I do not believe that the hon. Members for Beaconsfield (Mr. Grieve) or for Orkney and Shetland (Mr. Carmichael) can be described as friends of the criminal. I accept that, coming from legal backgrounds, they genuinely want to improve the Bill. I do not doubt their personal sincerity on that score.
	When the hon. Member for Beaconsfield intervened on my hon. Friend the Member for Glasgow, Pollok, he used the word "intention". He has used that word frequently in the House and in Committee. He has made clear his intention time and again in supporting various amendments, but he has not explained the effect of the amendments. I accept that his intentions are true, but he has to accept, whether he likes it or not, that the effect of the Lords amendment will be to undermine the purpose of the Bill.

Dominic Grieve: I am grateful to the hon. Gentleman for his comments, but the intention of the Lords amendment is to introduce a safeguard that I would expect to be used extremely rarely and only in clear cases where it is apparent to the judge that a decision by the prosecutor to seek to initiate proceedings is plainly wrong, and that is it. That is the intention.

Tom Harris: The hon. Gentleman has, once again, proved my point. I accept that that is his intention. We agree on that, but I have to disagree about the effect, which will be to follow the path of previous legislation by being far too cautious and not achieving the intended aim.
	The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) said yesterday in talking about the Bill:
	"we supported that legislation . . . we voted in favour of the confiscation of assets from criminals, particularly drug dealers."—[Official Report, 17 July 2002; Vol. 389, c. 279.]
	Why was there not an asterisk at that point in Hansard, leading to a footnote saying, "Subject to the following conditions"? There is no point in saying one thing and doing another.

Nick Hawkins: When Members say that they support legislation, it does not mean that they support every dot and comma in the Government's proposals. If the Conservative party did not vote against a Bill on Second Reading, Third Reading or in another place, but simply wished to scrutinise it, to improve it and propose amendments that affected only small parts of it, it is entirely right for my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) to say that we supported it. That has always been the practice of the House in such matters.

Tom Harris: The hon. Gentleman obviously has a lot more experience in the House than I do. I bow to his greater experience, but I find it slightly unfair that the Conservative party can say, "Yes, of course we support the Bill. We believe in confiscating criminals' assets", and issue a press release saying as much, while in Committee voting time and again against the very heart of the Bill. Conservative Members tabled many amendments, and on every possible occasion they forced a vote on any measure to emasculate the Bill.
	The hon. Gentleman may or may not admit this, but the original point of the Bill was not to emulate previous legislation, but to introduce a brand new principle into English and Scots law. So, whether he likes it or not, discretion, which is what we need, will be available to courts. He has every right to disagree with that view, but that is what the Bill is about. He cannot say that he supports it, and then try to undermine the very heart of it.
	In Committee, the Conservative party moved a very similar amendment to clause 6, and it was pressed to a Division. The amendment has returned from the Lords in a slightly different form, but it will achieve the same. The Conservative party has lost the vote once already, and it should respect the democracy of the House and accept that we have already made up our minds. I hope that it will not press this issue to the vote.

Boris Johnson: Can the hon. Gentleman imagine a single circumstance in which a judge who sees a low-life drug dealer of the kind described by the hon. Member for Glasgow, Pollok (Mr. Davidson) and who has the opportunity to confiscate the assets of that criminal might decide not to proceed to do so unless he felt that an injustice might occur?

Tom Harris: That is an excellent question, and the answer is no. I cannot imagine any judge looking at a down-and-out drug dealer from Glasgow and saying, "No, I'm not going to confiscate your assets." What I can imagine is a judge seeing a well-to-do business man standing before him in the dock and suddenly thinking, "There is a respectable gent. Surely he can't possibly be involved in drugs." That is the point of the Bill. I am sorry, but the hon. Gentleman has to do a wee bit better than that if he is to justify his party's position.

Ian Lucas: Can my hon. Friend also imagine that an exceptional body of case law would develop on what precisely could be defined as exceptional circumstances? There would be many cases of doubt about that phrase, and many people who made money from death in their communities would benefit from the Lords amendment.

Tom Harris: I completely agree with my hon. Friend, who also has a legal background, although I certainly would not hold that against him. The point about the phrase "exceptional circumstances" is very similar to the point made by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). How can we define that phrase, other than through many years of legislation? Certain people in our society hope that that phrase will be inserted into the Bill. Let us make no mistake about the fact that certain people working in this country's criminal undergrowth are desperate for the Lord amendments to remain in the Bill.
	The hon. Member for Beaconsfield made a very good point during our very interesting debates in Committee. He said that previous Governments—Conservative and Labour—had tried time and again to introduce effective legislation to deal with drug dealers once and for all. Obviously, they wanted to use such legislation to fight the drugs menace. He said in his contribution that none of the Acts had been as effective as the Government of the day had intended. He was absolutely right. If the Lords amendment stays in the Bill, exactly that fate will befall this legislation.
	Frankly, having been involved in 39 Standing Committee sittings, I will not suddenly change my mind and want the Bill to be enacted without the powers to do what desperately needs to be done for the sake of this country, my constituency, those of my hon. Friends and, I hope, those of Opposition Members.

Annabelle Ewing: I rise to speak to these Lords amendments in so far as they apply to Scotland. I believe that an important constitutional issue is raised because, as we have heard, the Lords amendment would reintroduce an element of discretion in making confiscation orders in Scotland. Although there is a valid debate to be had about mandatory versus discretionary powers of sheriff or High Court judge in making such confiscation orders, the fact is that Westminster is not the appropriate forum in which to discuss that matter because jurisdiction over Scots law is devolved to the Scots Parliament.

Tom Harris: rose—

Anne McGuire: Will the hon. Lady give way?

Annabelle Ewing: May I continue for a moment; I shall give way later.
	The Scots Parliament voted to refer the Bill to Westminster under a Sewel motion on 24 October last year. The Scottish National party supported that move, but if one reads the report of the debate in the Scots Parliament—

Mark Lazarowicz: Will the hon. Lady give way?

Annabelle Ewing: I shall give way in a moment.
	The key point is that the Bill has undergone substantial and major changes in relation to its provisions that are applicable to Scotland. In particular, the original Bill did not propose any amendment to the current and traditional discretionary powers of the sheriff or High Court judge. Even the right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), the then Minister in the Scotland Office, speaking to the Scottish Affairs Committee on 7 November last year, agreed that there would be a political imperative to refer the Bill back were there substantial or major changes. Unfortunately, the then Minister seems subsequently to have changed his view. When the SNP group called a Division on Report on an amendment that would have secured the referral of part 3 of the Bill—which includes this grouping of amendments—back to the Scots Parliament, although we managed to gain support from all parties in the House amounting to 172 votes, we received no votes whatever from new Labour Members.

Mark Lazarowicz: rose—

Anne McGuire: rose—

Annabelle Ewing: I shall give way to the Under-Secretary.

Anne McGuire: Will the hon. Lady please explain the inconsistency in her argument given that the Scottish Parliament gave the power under the Sewel motion to legislate in this area? As far as I and, I am sure, every Member of the House is aware, it has not asked for that Bill to be sent back. It must be happy with what is happening.

Annabelle Ewing: I fear that the Under-Secretary has not been listening to what I said. The key point is that a substantial change has been made to the Bill. The right hon. Member for Carrick, Cumnock and Doon Valley agreed that there would be a political imperative to refer the Bill back to the Scottish Parliament if there had been substantial changes to it. Perhaps the Under-Secretary does not agree with the right hon. Gentleman.

Mr. Deputy Speaker: Order. We cannot have a substantive debate on this matter. I was prepared to allow the hon. Lady to refer to it as a prologue to anything that she might wish to say about the substance of the amendment. The question of whether it is a proper matter for the House, however, has already been decided.

Annabelle Ewing: I thank you, Mr. Deputy Speaker. I will be guided by your remarks.
	I want to conclude by stating that I support the Bill. It is a very important piece of legislation. I supported it on Third Reading, and it is clear that it will go a great way to deal with the evil of drugs barons who are a blight on communities the length and breadth of Scotland. My support has not changed, but I feel that the spirit and the provisions of the Scotland Act 1998 should none the less be respected.

Martin Smyth: I support the Bill, and I am very glad to see it moving forward, but some of the extravagant language that has been used, both for and against the Bill, has left me wondering. The heart of the Bill would be torpedoed. I do not believe that the effects would even be of the order of the injury to David Beckham's foot, and he recovered in time for the World cup.
	We must be realistic. When the Minister referred to mandatory provisions to avoid plea bargaining, my mind went back to the early 1970s when the then Northern Ireland Government set a mandatory six-month sentence for those who were involved in disorderly behaviour. A young man walking down the Antrim road, whistling, suddenly discovered that he was in a riot situation. He was scooped up, brought before the magistrates court, and a charge of drunk and disorderly was read out, at which point, he was asked, "How do you plead?" He replied, "Not guilty, I don't drink." The solicitor asked whether he could approach his client. He came over to the young man, and said, "I can get you off on drunk and disorderly. A six-month sentence is mandatory for disorderly behaviour." The young man got off, but he now has a record of being drunk and disorderly.
	My point is that I started out as sympathetic to the position manifested in the Bill. I have come to wonder, however, whether we are losing the thread of the argument because we are introducing aspects that are wrong. At least an understanding should be given that the court might make a judgment, in the light of the evidence in front of it, as to whether, at that stage, to proceed accordingly.

Bob Ainsworth: We may have got off to a bad start in this debate. The Opposition are clearly so upset at the allegations made by my right hon. Friend the Prime Minister that, subsequently, they are desperate to suggest that the amendment is of no significance. I do not believe that it is; and I do not believe that the records shows that. It is an issue, as some of my hon. Friends have said, that caused considerable lively debate in Committee. No matter how much anybody tries to dress it up, the Lords amendment is of great significance. It moves us back in the direction of a discretionary scheme in which more discretion is granted to the courts in relation to whether they ought to get into the area of confiscation.
	I asked a couple of questions of the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). Those who listened will recognise that I received an answer to neither of them. I asked him whether he could shed some light on why the previous Government, of whom he was a part, felt that there was a need to introduce mandatory powers in this regard.

Douglas Hogg: Will the Under-Secretary give way?

Bob Ainsworth: I shall do so in a minute, when I have completed referring to the right hon. and learned Gentleman. I also asked him, based on his considerable experience, which I do not have, whether he has any knowledge of any great injustice that has occurred since that date—he has great knowledge of what happens in the courts, and I am sure that he has contacts who would tell him. Again, I received no answer. Mandatory powers in this regard were introduced by the last Government about 10 years ago, as I described. I received an answer to neither of my questions, and I wonder why.

Douglas Hogg: In fact, I did give the Under-Secretary an answer. The answer is that I am against mandatory powers, and I always have been. I illustrated that by saying to you, Mr. Deputy Speaker, yesterday, that the mandatory life sentence for murder should be done away with, and that judges should be given the option of imposing a determinate sentence. I am against mandatory sentences.

Bob Ainsworth: The right hon. and learned Gentleman is absolutely right. He did say that, and I heard him say it, but it was not an answer to the question that I asked. He knows that. I asked him whether he could shed any light on the decision that was taken. All I have to refer to is Hansard, which I have read to the House. The Minister, who is now in another place, referred to the fact that, over the previous six years, the courts had not been prepared to use confiscation as was envisaged, and that there was a need to go down the mandatory route. All I have to refer to is the public position of the Government; the right hon. and learned Gentleman has the inside story. He could give us an insight into why it was felt that a mandatory route should be followed. He has not done so; he has chosen to answer another question.

Alistair Carmichael: rose—

Bob Ainsworth: Many other Members—one of whom is trying to intervene now—have experience of practising in the courts. I do not know how long the hon. Member for Orkney and Shetland (Mr. Carmichael) has practised in the courts, but he and others could give us examples of how the mandatory nature of confiscation has led to the kind of injustices that people are saying will arise now. I have not heard such an example. What I have said consistently in Committee and on the Floor of the House is that all the evidence suggests that confiscation is under-used in this country. The powers need to be improved and built on; they do not need to be retreated from. If the hon. Gentleman can give an example of an injustice having occurred, we would all be grateful to listen to it.

Alistair Carmichael: The Minister is well aware that whenever power is given to the Executive, that power is open to abuse. It is therefore necessary to provide protections so that that does not happening. However, does it not cause him even the merest flicker of embarrassment to stand at the Dispatch Box as a Labour Minister justifying his Government's actions by saying, "We're doing exactly the same thing as the Tories"?

Bob Ainsworth: Despite the fact that the hon. Gentleman has experience in the court, once again my question was not answered in the affirmative or the negative. He could give no example of any injustice to show that there is a problem.

Norman Baker: My hon. Friend is relying on the Minister for an answer.

Bob Ainsworth: The hon. Member for Orkney and Shetland is entitled to bring his knowledge and experience to the debate. He asks whether I am embarrassed that the Bill is based on legislation introduced by a Conservative Government. If he reads the relevant Hansard, he will find that my party supported confiscation. The difference is that we are trying to be effective.
	I told the hon. Gentleman in Committee that I had hoped that we would be able to climb over the politics. We cannot allow more than a generation of British people to go without effective measures against the profits of crime. If we fail to deliver, we will cause disquiet about our ability to do what they know needs to be done. I had hoped that hon. Members would join us in trying to be effective.

Vera Baird: Is not the argument just an invention by the Opposition? The director is a public authority. He will have to act in all respects in ways that are compatible with the Human Rights Act 1998 and all convention rights on the ownership of property and fair trials. If he does not, the victim could bring a freestanding course of action. Their argument is utter nonsense.

Bob Ainsworth: My hon. and learned Friend brings considerable expertise to the debate and she is absolutely right. Opposition Members know that the safeguards are in place.
	The hon. Member for Beaconsfield (Mr. Grieve) suggested that previous regimes were more draconian and less broad. He is right in the latter regard. However, on whether they are more draconian, I read out Hansard from 1986 in which it is stated that the assets of an individual
	"that have passed through his hands in the previous five years, represent the proceeds of"
	crime
	"except in so far as he shows otherwise."—[Official Report, 21 January 1986; Vol. 90, c. 243-44.]
	That hardly indicates that we are introducing something that is intended to be less draconian. We supported the proposition at the time. We support it now. We want to be effective. All parties thought at the time that the measure was needed.

Dominic Grieve: I agree with the Minister. I think he accepts that the breadth of the scope of the legislation means that it is possible to attach confiscation proceedings to individuals who have committed crimes that were not contemplated in earlier legislation which an ordinary person, looking in from the outside, would not necessarily have associated with money laundering or the possession of criminal assets. That is why we think that the extra safeguard is sensible. The Minister may also agree that if there is a power of judicial review, it might be sensible to allow the judge who decides the matter to carry out the review himself.

Bob Ainsworth: The Lords amendments reintroduce the concept of discretion. We could never be certain how that would be used because courts would apply it differently. The hon. Gentleman's party did not support that idea when it was in government. We do not support it now. The system incorporates safeguard that can be relied on. Confiscation hearings are instigated only by the court itself or on the application of the director, the agency or the prosecuting authorities. The director and the prosecuting authorities are under a duty to act reasonably and will not mount hearings for inappropriate cases.
	Furthermore, the court has the power in criminal lifestyle cases not to make the assumptions if there is a serious risk of injustice. The only valid arguments that I have heard relate to events that would constitute a serious risk of injustice. The safeguards are in place. Opposition Members know that. There is no need to return to the idea of discretion, with all the inconsistencies and uncertainties that it implies.

Boris Johnson: Why might a judge choose to exercise his discretion against confiscating assets unless he thought that there was a serious risk of injustice? Can the Minister give any substantive reasons why a judge might so act?

Bob Ainsworth: I do not believe that it is necessary to go backwards. Quite the reverse. We have a serious problem with organised crime which is built largely around drugs. The hon. Gentleman knows that and it is widely recognised by all hon. Members. This is not the time to go backwards and water down proposals.
	Safeguards are available to cover serious injustices. We do not need more safeguards. If hon. Members want to be effective against drug dealers and organised crime they will support us in the Lobby to reject the Lords amendments.

Question put, That this House disagrees with the Lords in the said amendment:—
	The House divided: Ayes 260, Noes 149.

Question accordingly agreed to.
	Lords amendment disagreed to.

Clause 7
	 — 
	Time for making order

Lords amendment: No. 5.

Anne McGuire: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendments Nos. 11 to 13, 16, 17, 26, 27, 44, 49 to 51, 54, 55, 74, 80 to 82, 85, 86, 95 and 96.

Anne McGuire: This group of Government amendments on the subject of postponement has two basic purposes, and I trust that we can move forward on the basis of consensus. First, the amendments take account of the criticism of the original version of clause 7 that was made in Committee. Clause 7 originally stated that a confiscation order must be made before sentence. Although the clause was qualified by the postponement provisions in clauses 15 and 16, we agreed that it was somewhat too categorical. In practice, more often than not confiscation orders are postponed. Clause 7 and its equivalents in parts 3 and 4 have therefore been removed, and clause 15(1) and its part 3 and 4 equivalents now leave it open as to whether the court postpones the confiscation hearings.
	Secondly, we have added a provision that will prevent a confiscation order from being quashed merely because of a procedural error in the court's application of the postponement provisions. We are most concerned that that sort of thing should not happen to confiscation orders under the Bill. The main purpose of postponement provisions is to enable defendants to be sentenced quickly and to give the court time to deal with the confiscation issues. We do not wish them to be grounds for appeals on technicalities, and the amendments will prevent that from happening.
	The amendments will improve the practical operation of the Bill, and I commend them to the House.

Dominic Grieve: I can confirm to the hon. Lady that there is agreement on the amendments. I am grateful to the Government for having taken on board what was said during one of the constructive episodes in Committee in which we were pleased to participate. This illustrates the necessity of a dialogue between Opposition Members, Ministers and their Back Benchers to try to improve a Bill. I am delighted that the hon. Lady has been able to achieve that.
	Lords amendment agreed to.

Clause 9
	 — 
	Defendant's benefit

Lords amendment: No. 6.

Anne McGuire: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendments Nos. 7, 8, 10, 14, 15, 31 to 33, 45, 46, 48, 52, 53, 67, 75 to 77, 79, 83, 84, 100 and 324.

Anne McGuire: This is a mixed group of Government amendments. Some of them are fine tuning, but as a whole they are important to the operation of the Bill.
	Amendments Nos. 6 to 8, 10, 45, 46, 48, 75 to 77 and 79 deal with a technical problem affecting certain cases where a previous confiscation order has been made against the defendant. That will ensure that any benefit taken into account for the purposes of a previous confiscation order is also taken into account when the court comes to make a new order against the same person.
	Amendments Nos. 14, 15, 52, 53, 83 and 84 respond to Opposition concerns about clause 19, which empowers the court to order the defendant to provide information.
	First, we have inserted a protection against self-incrimination for defendants. Secondly, we have made it clear that a failure to comply with the court's order exposes the defendant to contempt proceedings. That is necessary because the court has an explicit power under the clause to draw adverse inferences from such a failure. In the absence of a clear statement to the contrary, that explicit power could be misconstrued as preventing the court from exercising its contempt powers. The amendments put it beyond doubt that that is not the case.
	Amendment No. 31 would make hearsay evidence admissible in restraint proceedings in England and Wales. It is needed because hearsay is not normally admissible in the Crown court, and restraint proceedings rely heavily on it in practice.
	Amendments Nos. 32, 33 and 324 simply take note of the enactment of the Land Registration Act 2002. Amendment No. 67 would bring the legislative steer in clause 134 on the powers of the court and administrator in Scotland into line with those in England, Wales and Northern Ireland.
	Amendment No. 100 is technical, and would bring clause 212, which relates to the protection of receivers in Northern Ireland, into line with its equivalents for the other two jurisdictions.

Nick Hawkins: We welcome the Under-Secretary's acknowledgement of many matters that we raised in Committee. I also welcome her transformation from being a Whip, in which role she also helped the Committee. It is a shame that the hon. Members for Glasgow, Cathcart (Mr. Harris) and for Glasgow, Pollok (Mr. Davidson), who served on the Committee and claimed in the previous debate that the Opposition were trying to wreck the Bill, are no longer present to hear her acknowledge that the Government are responding to the constructive points that we made to improve the measure. At least her fellow Under-Secretary is here and, whatever he says, he knows in his heart that the time in Committee was well spent and that it improved the Bill.
	We want to make two small points. First, I want to consider the new provision about hearsay evidence, which was not debated in Committee but was introduced by Lord Bassam of Brighton on 22 April 2002. As Lord Goodhart said:
	"It is obvious that any introduction of hearsay evidence into criminal proceedings . . . where it was not available before is a matter that needs to be looked at very carefully."
	He went on to say that its introduction
	"is solely in relation to restraint orders."—[Official Report, House of Lords, 22 April 2002; Vol. 634, c. 115.]
	He did not therefore object to it. Will the Under-Secretary confirm on the record that the Government do not intend the provision to be the thin end of any wedge, or plan to introduce new provisions to use hearsay when it has previously been inadmissible?
	Will the Under-Secretary of State confirm that she and her officials will try to ensure that all those who try the cases that involve the new use of hearsay have specific extra training? We are considering a new approach, which, as the Government rightly said, broadens powers. I should be grateful if the Under-Secretary would confirm that the work of the Judicial Studies Board and the preparation of judges to deal with the novel factors will take account of that.
	The Under-Secretary referred to another matter that I wanted to raise: the importance of the privilege not to self-incriminate. We welcome the Government's response to Opposition Members' anxieties in another place and in Committee about that.
	The hon. Lady was right to say that our debates, which led to the Government amendments, greatly improved the Bill. We do not therefore oppose the amendments.

Anne McGuire: I thank the hon. Gentleman for his comments. Although we have criticisms of the Opposition, much of the discussion in Committee was constructive and I am grateful to him for recognising that we responded to that.
	I confirm that the provision on hearsay does not constitute the thin end of any wedge. It does not change the procedure and is simply a consequence of moving restraint from the High Court to the Crown court. Although I accept that introducing hearsay may be a new departure in some circumstances, we give a commitment to additional training. The Judicial Studies Board will ensure that that is done. In view of those assurances, I trust that we shall have consensus on the amendments.
	Lords amendment agreed to.
	Lords amendments Nos. 7 and 8 agreed to.

New Clause

Lords amendment: No. 9, after clause 10, to insert the following new clause—Compensation of creditors

Bob Ainsworth: I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendments Nos. 30, 47, 66, 78, 99 and 166 and the Government motions to disagree thereto.

Bob Ainsworth: In moving on to compensation for creditors with regard to the confiscation system, I should like to make it clear to the House that, in discussing Lords amendment No. 4 and the associated group of amendments, I hope that I said nothing to detract from the understanding that confiscation applies to a very wide range of offenders—far wider than that which was covered previously. My hon. Friend the Member for City of York (Hugh Bayley) raised an issue in respect of international bribery and corruption, about which I know he is concerned. I am sure that he will be pleased to hear me confirm that the Bill enables criminal confiscation orders to be made in relation to such offences and allows restraint of assets that are the proceeds of such offences.
	The amendments cover a territory that should be very familiar to the House. We discussed the issue with which they deal at considerable length in Committee on 20 November last year. I should also make it clear to the House that the provisions that the amendments would overturn have been a settled feature of the tough confiscation legislation that the Conservative party introduced in 1986 and 1988. The hon. Member for Orkney and Shetland (Mr. Carmichael) is not present, but I am not the slightest bit embarrassed to say that we are trying to build on that tough legislation.
	Given the degree of earlier discussion about the issues, I should like briefly to describe the amendments, which all relate to the position of unsecured creditors who have outstanding loans. The effect of amendments Nos. 9, 47 and 78 would be to make the enforcement authorities liable to pay the unsecured debts of any person whom the defendant was unable to repay because of the making of a confiscation order. Amendments Nos. 30, 66 and 99 would allow restrained assets to be used to pay any debts of the defendant that were incurred before the restraint order was made. Amendment No. 166 would have a similar effect in relation to part 5 as amendments Nos. 9, 47 and 78. It would empower to court to require the enforcement authority to pay compensation to any person whom the respondent was unable to pay because of the making of a civil recovery order. The requirement could be placed on the enforcement authority if the debt was incurred for full consideration and the debtor had no reason to expect that the recovery order could be made against the respondent.
	I shall speak first to the amendments affecting parts 2, 3 and 4. The amendments would undermine the confiscation scheme so completely as to render it inoperable. As I indicated, they would make the enforcement authorities liable to pay any unsecured creditor of the defendant at the time when the confiscation order was made.
	The amendments state that such payments would be a matter for the courts; the creditor would make an application to the court and it would be for the court to decide who should pay. This raises the question of how such applications would be defended. The defendant to the action would be the enforcement authority involved in obtaining the confiscation order—it might be the Crown Prosecution Service, Her Majesty's Customs and Excise, or the director of the Assets Recovery Agency. It would fall to those authorities to defend such actions. I would personally prefer the CPS, Customs and the director of the agency that we envisage arising from the Bill to spend their time carrying out their proper functions, rather than defending actions against them in the courts from persons claiming to be the unsecured creditors of criminals.

Douglas Hogg: Will the Minister be good enough to tell the House the difference in principle between protecting under clause 310 an innocent purchaser for value of what would otherwise be recoverable property and a bona fide supplier of goods such as the local plumber?

Bob Ainsworth: I think that it is quite clear what the difference is. The powers in the Bill give us various abilities to trace the proceeds of crime or that which has come to represent the proceeds of crime. To do that, we need to be able to trace it through the many transactions that might take place, some of which will be the quite genuine transactions that people enter into throughout their lives, while others will be transactions designed to hide the proceeds of crime.

Norman Baker: rose—

Bob Ainsworth: I have to tell the hon. Gentleman that I cannot respond to two Members at once.
	In giving the powers to trace the eventual representation of the proceeds of crime, we need to protect the genuine, bona fide purchaser for value, but I do not believe that the state needs to take on the responsibility for compensating the unsecured creditors of criminals. I am not sure that the right hon. and learned Gentleman has ever argued that position in the past, and he should think very seriously about some of the results that might flow from that proposition.

Norman Baker: The Minister said, if am not misquoting him, that he believed that the Lords amendments would undermine the confiscation procedures. Is it not the case, however, that those who have ill-gotten gains will still lose them, and that the only questions are: what will happen to those ill-gotten gains, and should genuine creditors be able to reclaim their money?

Bob Ainsworth: If I thought that that was the case, I would give serious consideration to the amendments. I do not believe, however, that members of the criminal fraternity are so naive that—if we put these proposals into the Bill—they would not be able to conjure up situations in which they owed all sorts of people money, to ensure that, if a confiscation order were made against them, they would have no effective assets that were not owed to whoever—their wife, perhaps, or Joe up the road. In that way, they would make sure that the state could not get its hands on the proceeds of crime.

Norman Baker: I understand the Minister's argument. Does he accept, however, that there will be many occasions on which innocent tradesmen and others—many of whom will be adversely affected by the provisions in the Bill—will be genuinely innocent victims? Is he saying that, if such people have to suffer, that is a price that must be paid for the greater good?

Bob Ainsworth: There will be such occasions, but I ask the hon. Gentleman to consider this argument. When people become unsecured creditors of other individuals, it is a decision that they take for themselves, and a risk that they take upon themselves. There are many circumstances in which they effectively forfeit what they have loaned to the individual concerned. If someone owed tax, for example, and had no other means, would the hon. Gentleman suggest that the Inland Revenue should not collect the tax, and that the unsecured creditors should be paid instead, coming ahead of the tax man?
	Would the hon. Gentleman suggest that, if a fine were imposed by the court on someone as a result of his criminality, the payment of the fine ought to come lower down the list than the payment of an unsecured creditor in relation to the call on that person's assets?
	There are lots of circumstances in bankruptcy, court and other proceedings in which people do not come at the top of the list because they are unsecured creditors. I see no reason for their coming top of the list with regard to confiscation. My real problem—I hope that the hon. Gentleman accepts this—is that the scope for abuse is absolutely phenomenal—to the point where it would render confiscation inoperable.

Mark Field: I appreciate that there is scope for abuse, and the Minister is right to refer to it. Equally, there is the issue of commercial certainty and common sense. In answering the hon. Member for Lewes (Norman Baker), the Minister referred to the real point on insolvency. However, does he not appreciate that there is an inconsistency between the Government's position in that regard and the new Enterprise Bill, under which, of course, the Crown preference is being done away with? It is therefore now understood that the Crown—be it some tax authority or other—would not necessarily have preference in such circumstances when an insolvency occurred.

Bob Ainsworth: Let me continue with the notes that I had planned to read to the House. Insolvency will be picked up and, I hope, dealt with satisfactorily. If not, we may wind up differing on the issue.
	As I was saying, the enforcement authorities would be in the front line of implementing the amendments, so I asked my officials to ask them what they think. [Interruption.] The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) has evidently lost all interest in the Bill.
	We asked those who would wind up defending such arrangements—Customs and the CPS, for example—what the practical effect of the amendments would be. They told us that it would be highly detrimental to the operation of an effective confiscation system. They consider, as we have always argued, that the amendments would provoke a flood of bogus applications from alleged creditors, who are often the criminal's associates, based on spurious documents purporting to show that debts occurred before the relevant date, when in reality they did not.
	The amendments would also encourage defendants to defeat the confiscation process by running up legitimate debts, safe in the knowledge that the authorities would be left out of pocket at the end of any confiscation proceedings. That would deter the authorities from taking on cases in the first place.

Douglas Hogg: rose—

Bob Ainsworth: Now that the right hon. and learned Gentleman has decided to pay attention to the proceedings, I give way to him.

Douglas Hogg: I know that the Minister is concerned about the position of employees. Will he please tell the House the answer to this question? If a bona fide person is employed by the person against whom the confiscation order is made and the effect of the confiscation order is to prevent the person against whom it is made from paying his employees, will the employee have any claim as a secured creditor, or is he simply out of pocket?

Bob Ainsworth: Let me ask the right hon. and learned Gentleman to think about the issue that he raises. I do not know whether he is suggesting that, because somebody is an employer, that protects them against the power to confiscate the proceeds of crime.

Douglas Hogg: Employee protection.

Bob Ainsworth: I am talking about the employer. I do not believe that employers should be put in any special position where they are protected because they are employers and allowed to continue to keep the profits of crime.

Douglas Hogg: Employee protection.

Bob Ainsworth: Employees have statutory protection in many, many circumstances. I see no measures in the Bill that would decrease the protections given to employees in many circumstances in which they find themselves on the receiving end of the demise of their employer.

Nick Hawkins: Someone who is owed wages, but has not yet been paid, simply becomes yet another unsecured creditor—is that not true? The Minister may not fully understand the implications of his own legislation, but there is no doubt that owed wages would simply disappear if the confiscation order were made. Then there would be no security for the person who was owed.

Bob Ainsworth: As I think I have told the hon. Gentleman, I do not believe that because someone is an employer—

Nick Hawkins: That is not the point.

Bob Ainsworth: It is the point. Will the hon. Gentleman listen for just a minute? I do not believe that because someone is an employer and therefore has the responsibilities of an employer, a separate set of regulations should govern what that employer should get away with in terms of profits from crime. Furthermore, I do not think any measures in the Bill are detrimental to the statutory protections offered to employees in the many other circumstances in which their employer's demise may take place.

Rob Marris: It appears that the Opposition want to put the employee of someone subject to such an order in a better position than the employee of a company that goes bust. In the latter case, the holders of fixed charges and floating charges would in many instances take all the money. The discharged employees would have recourse only to the Secretary of State's redundancy fund, which would apply following a restraint order against, say, a drug-dealing employer.

Bob Ainsworth: My hon. Friend is right. It is being suggested that employees of a criminal employer would enjoy greater protection than those of a legitimate business enterprise. I do not know whether Conservative Members believe that that ought to be the case, but if they want to advance such an argument they can wait until I sit down. It would certainly be interesting to hear what they had to say.

Annabelle Ewing: I do not think such an instance will arise, but in what other circumstances—under Scotland, England and Wales or Northern Ireland law—are creditors put in such a preferential position?

Bob Ainsworth: I do not pretend to be an expert. I never come to the Dispatch Box and claim to be an expert on insolvency, contract law, commercial law or anything else of that nature. But I know of no circumstances in which people are given such preferential treatment, which is why I have raised the issue of tax that is owed and the issue of fines. In neither of those circumstances are creditors given preferential treatment in the case of unsecured loans, but that is now being proposed in relation to confiscation.
	As I have said, the amendments would encourage defendants to defeat the confiscation process by running up legitimate debts, safe in the knowledge that the authorities would be left out of pocket at the end of the proceedings. That would strongly deter the authorities from initiating cases, and would put a significant weapon in the hands of criminals seeking to disrupt their activities. We also consider the amendments wrong in principle, for a number of reasons. As we said in Committee, they have implications for a wide range of other debts to the Crown, such as unpaid taxes and fines. Although it was argued in another place that it was possible to distinguish between such disposals, there is no difference between them: they are debts to the Crown.
	We have yet to hear a satisfactory explanation of how that objection can be overcome. The logical consequence of the amendments, if they are accepted, is the Government's establishing a scheme to transfer unpaid taxes, fines and other obligations to the creditors of those with outstanding loans which, as a result of an obligation, the debtor is unable to repay. We feel that no Government would ever accept such a principle. Nor is it clear to us why the enforcement authorities should be liable for the debts, given that the defendant's liability for a private debt is unaffected by the making of a confiscation order. The defendant should be obliged to pay the confiscation order and to honour the debt, which is what the Bill provides for.

Dominic Grieve: It seemed that the Minister answered his own question as he went along. He mentioned taxes and fines, and said that we should not contemplate the idea of taxes and fines being paid to a creditor, but I am sure that he will agree that we are not concerned in this case with taxes and fines. This is a completely new regime. The money that is being taken by the state is not being taken either as a tax or a fine. Indeed, in the civil context, it is a novel concept.

Bob Ainsworth: The fact that it is a new concept hardly makes the hon. Gentleman's case. These are the proceeds of criminality. He appears to suggest that the proceeds of crime should be used to pay creditors. If someone were to steal my car, they should not use the proceeds to pay their debts, or be allowed to do so. Why on earth does he think that someone should be allowed to use the proceeds of crime to pay their debts?

Dominic Grieve: The Minister is being disingenuous. If his car is stolen and the money is used by a person, he will have a prior claim on that money. We have discussed this in Committee; we went round and round in circles. The point is that no one has a prior claim to a great many of the assets that are being confiscated. They are not a debt owing to the state. They are not a tax. They are not a fine. They are moneys that may have been acquired by a tremendous amount of sweat and labour by the person concerned. It just happens to have been tainted by criminality. That is the distinction. When implementing the new regime, we should have regard to the victims, who will be the unsecured creditors in this case.

Bob Ainsworth: As I have said, the problem, which I hope the hon. Gentleman acknowledges, is that it would be easy to fabricate such situations, but I am not suggesting that the creditors are criminal in those circumstances. We do not encourage people to thieve to pay their debts, so why on earth should we allow people to pay their debts from property that they have stolen? I simply do not see the point. That is my fundamental objection in principle.
	If the hon. Gentleman is to persuade the House to support the amendments from the other place, he will have to explain in great detail how on earth we would guard against the kind of abuses that would inevitably arise, rendering confiscation ineffective. Here is a second opportunity for the Opposition to prove the Prime Minister wrong and to support the Government on these much needed measures, which go to the heart of the Bill.

Ian Davidson: I would be grateful if the Minister clarified what the effect of the Opposition proposals would be. Am I right in thinking that, if someone were charged but not detained on offences, and they would be likely to know whether they were guilty, they could easily decline to pay any credit card bills that they had outstanding and incur all sorts of expenditure? If the Lords amendment were passed, would that expenditure be met out of assets that would otherwise be seized? Is that the way in which the provision would operate? Surely there would be a perverse incentive to waste money—to spend money on meals and drink?

Rob Marris: These people could buy a Rolls-Royce.

Ian Davidson: If they bought a Rolls-Royce, the Rolls-Royce would then be an asset that could be seized, but it would be difficult to get a meal or drink back. It is difficult to get a drink out of some of my colleagues at the best of times. After it had been consumed, it would be even more difficult.

Bob Ainsworth: I do not know whether my hon. Friend falls into this category, but there are people who, for many different reasons, live constantly in a state of credit and debt.
	There would be so many ways round the legislation if we accepted the amendments. If, because of the activities that they knew they were involved in, people had any suspicion that they might be threatened with a restraint order, they could ensure that their debts were always more than their assets, and so be free from any threat of confiscation. Alternatively, they could manufacture unsecured creditors after the fact, and it would be extremely difficult and massively time-consuming to prove that those creditors were not bona fide.
	Earlier in the debate hon. Members complained that the Assets Recovery Agency ought to be two or three times the size that we envisage, and Members from Northern Ireland want there to be a substantial office over there. Is this what we want the Assets Recovery Agency to do? Do we want it to spend half its time trying to prove in court that creditors are not bona fide, or do we want it to get on with confiscating the proceeds of crime? I suggest the latter, so I ask hon. Members to vote against the Lords amendments.

Nick Hawkins: We on the Conservative Benches feel that in part the Minister and his colleagues genuinely misunderstand the purpose of the Lords amendments, and in part, as we heard in the later part of the Minister's speech, they are overstating their response. May I make it clear, especially to Government Back Benchers, that the purpose of the amendments is only to prevent the creation of more entirely innocent victims of the Bill? To those who are worried about the idea of protecting the innocent little man, I shall quote from what Lord Goodhart said in response to the Minister in another place:
	"As the Minister says, the Bill protects the rights of secured creditors. That means banks and building societies. They are the big boys, who always come out well on this sort of occasion. However, the small people—the unsecured creditors—lose out."
	In an extraordinary exchange between the Minister in another place—Lord Falconer of Thoroton—and the Opposition spokesmen there, the Minister suggested that innocent people could protect themselves from the legislation by "getting security", and putting themselves in the position of secured creditors. To his credit, the Under-Secretary has not argued that this afternoon. Both my noble Friend Baroness Buscombe and Lord Goodhart pointed out that it was ridiculous to expect small builders or plumbers to get security.
	We are talking about the entirely innocent bona fide person with no knowledge that the small amount of building or plumbing work that he is doing might be for somebody who, although they appeared legitimate, later turned out to be on the receiving end of a confiscation order.
	When these matters were being debated in another place—the amendments were eventually carried by a substantial majority—Lord Goodhart said:
	"Obviously, we do not wish to enable bogus debts and artificially created debts to be used, as I have said, to extract money. So the existence of full consideration provided by the creditor must be shown. Thirdly, the creditor must have no reason to believe that a confiscation order or a civil recovery order is likely to be made so that if the creditor is aware of the possibility of an order then he is on notice of the existence of the risk. We accept that in those circumstances it is proper that he should bear that risk".—[Official Report, House of Lords, 25 June 2002; Vol. 636, c. 1231-37.]
	We accept entirely the Minister's case against the creation of bogus debts, but if he consults those who advise him, he should accept that the courts are well used to analysing whether debts are bogus. If it is made clear, as was the intention when the amendments were agreed to in another place, that their purpose is only to protect the entirely innocent, such as the small builder or small plumber that I have talked about—

Douglas Hogg: My hon. Friend points out that the courts have experience in determining whether or not a claimant is bogus. Will he also point out to the Under-Secretary that clause 310 and related clauses make provision for exactly that process?

Nick Hawkins: As my right hon. and learned Friend points out, certain other parts of the Bill are inconsistent with this one. In our lengthy debates in Committee, we tried very hard to ensure that, so far as other aspects of the Bill were concerned, those who are bona fide are protected. The Government have accepted our argument in other parts of the Bill and in their own provisions, and we find it difficult to understand why they have not accepted the same logic here.

Stephen Hesford: Will the hon. Gentleman address the point that was made earlier? The principal reason why Labour Members will reject the amendments is that sham creditors could be put forward by drug dealers, for example, and it would take for ever to get the compensation orders through the courts. The hon. Gentleman has not mentioned that point, and he should deal with it.

Nick Hawkins: The hon. Gentleman is mistaken—that is precisely what I have been talking about. Indeed, I quoted Lord Goodhart, who explained that the purpose of the amendments is to prevent the creation of bogus debts. The hon. Gentleman should know from his own professional expertise that in bankruptcy cases, courts frequently have to deal with supposedly legitimate debts that turn out to be bogus. Courts therefore have enormous expertise in such matters.
	We are talking about trying to prevent entirely innocent people from being caught by these provisions as a side wind. It is a question of introducing not loopholes for employers, but protection for employees and small traders.

Ian Davidson: rose—

Stephen Hesford: For the benefit of the House, will the hon. Gentleman explain what will happen if drug dealers know that they can gum up the works? My hon. Friend the Minister mentioned staffing the agency in respect of Northern Ireland and other places. If drug dealers know that they can gum up the works with all this nonsense, they will do so, and the Assets Recovery Agency will spend its time gazing at its own navel.

Nick Hawkins: My point is that the works would not be gummed up because the courts have great expertise in showing easily what is bogus and what is not; indeed, that process is already commonplace in insolvency cases. These amendments were put forward in another place on the basis of making it clear, specifically and in terms, that there is no intention of opening a loophole for bogus claims.

Several hon. Members: rose—

Tom Harris: Perhaps the hon. Gentleman can deal with a specific example of what Labour Members are worried might happen if the amendment were accepted. What if it emerged that a suspected drug dealer who is appearing before the courts owes hundreds of thousands of pounds to, for example, the much maligned sauna parlour or tanning shop? Indeed, we discussed such an example at length in Committee. Such premises are often owned by relatives or friends of drug dealers. With a good accountant, it would be very easy to wrap up such a process interminably—to the extent that such confiscation orders would mean absolutely nothing.

Nick Hawkins: I am afraid that the hon. Gentleman is mistaken in thinking that it is easy to wrap up these matters interminably. Given the existing expertise in our courts, I do not accept that it would be at all difficult to disentangle the bogus from the genuine. That happens all the time—day in, day out, week in, week out. It would not gum up the works.

Bob Ainsworth: The hon. Gentleman says that it happens all the time and that that is the reality of life, but let us consider that reality. He talks about trying to protect the little man, but he will surely accept that small business people have to protect themselves from default every single day of the week. When was the last time he managed to get a double glazing firm to fit windows without its receiving some money up front? How much work has he ever got a plumber to do without providing some kind of credit first? He is a Member of Parliament who is clearly not going to rush off, yet such people still seek to protect themselves. As he well knows, that is the reality of life as it affects the little man now.

Nick Hawkins: I do not accept that that is common practice for small firms. It is not easy to obtain security for small debts. Lord Falconer of Thoroton repeated the argument that that is the way of the world. However, in reply, Lord Goodhart said that
	"even the most distinguished and successful of barristers sometimes has to appear to advance a totally indefensible argument. I must say that I have rarely, if ever, heard such an indefensible argument as that put forward by the noble and learned Lord this afternoon.
	For a start, he said that the enforcement authority would be an agent paying off the unsecured debts of the criminal . . . he then said that what we are asking for would be 'stunning' protection. What is stunning about this is the Government's claim to take away an innocent person's property. That is, among other things, contrary to the first protocol of the European Convention on Human Rights.
	In the case of the builder that we have suggested, the Government are claiming money twice because the state gets the improved value of the defendant's building without having to pay"
	the trader
	"for the cost of the improvement. That is clearly double counting."—[Official Report, House of Lords, 25 June 2002; Vol. 636, c. 1237.]

Vera Baird: I intervene in a genuine search for enlightenment. The point has already been made by several hon. Members, but all we are really concerned about is a situation in which someone is forced into bankruptcy or insolvency. If the director takes away part of that person's assets but he still has some left, he pays his own debts. If he is forced into bankruptcy or insolvency, the hon. Gentleman wants to protect the little man from that situation; but why should the little man in that situation be in any better position because the criminal has been forced into bankruptcy by this legislation as opposed to by the VAT man, the tax man, his mortgagees or anyone else? [Interruption.]

Nick Hawkins: The simplest answer—as my hon. Friend the Member for Beaconsfield (Mr. Grieve) has just pointed out from a sedentary position—is that in this situation there is no debt. That is what makes it different from the conventional bankruptcy. The hon. and learned Lady shakes her head, but I hope that the Minister will accept our good will. We are not trying to drive a coach and horses through the legislation: we are trying to protect entirely innocent people. The Minister knows that and we discussed the issue at length in Committee.
	The debate will not improve by repetition, but when the Minister responds I hope that he will accept that when Baroness Buscombe and Lord Goodhart proposed the amendment in the other place, they were supported by many peers, of all parties and none, including Law Lords who understand the significance of the point that we are making. This is not simply a matter of removing the assets of the criminals: it is ensuring that no more innocent victims are accidentally caught in the side wind from the Bill.

Vera Baird: Much of what I intended to say has already been said, so I shall be brief. Unsecured creditors, by definition, do not have security for their debts. They are hostages to whatever befalls their debtor. He may run away and go overseas, and if they cannot get their money, that is hard luck. If the debtor becomes insolvent or bankrupt, again the creditors might not be able to get their money. That is not a new situation, nor is it unexpected. In business, that sort of thing needs to be taken in one's stride.
	I do not accept the argument put vicariously by the hon. Member for Surrey Heath (Mr. Hawkins), for the hon. Member for Beaconsfield (Mr. Grieve), that the order does not constitute a debt to the state. Once an order has been made, there could be no more acute debt to the state. Why should particular protection be given in such cases?

Dominic Grieve: I disagree with the hon. and learned Lady. Generally speaking, in civil litigation or even in tax there is a legal obligation of money owing by one person to another. In this case, although I fully support the institution of the new regime, there will be no debt owing. The money will be taken not because it is owed as a legal debt, but because its origin is tainted. That is a distinct state of affairs and that is why it would be proper to look to the other victims of the offender, which would include the small creditors.

Vera Baird: That intervention does not make sense. Once the order has been made, there is a debt to the state. It is as simple as that, and no alternative argument can alter the matter. The order will push the defendant into bankruptcy, at which point the debt becomes a debt to the state. It is at that point that a person owed money by the defendant will get into difficulties.

Boris Johnson: The hon. and learned Lady may be right that, in her legalistic phrase, it is a debt to the state, but does not the state also owe a duty to the innocent people who will be caught up in this expropriation of money?

Vera Baird: That takes me neatly to my next point. I repeat that there is no justification for putting victims of bankruptcy caused by this Bill into a separate category from those who are victims of other types of bankruptcy.
	No Conservative Member has offered a convincing argument for that. However, if such an argument had been made, there would need to be a value judgment about whether it was more important to protect unsecured creditors or to seize criminals' assets for the state's use. At least part of what is seized will be given to the local police force, for use on local policing needs such as the detection of crime and the prevention of future crime. The proceeds would be used to save people in my constituency and others like it from the disorder that wrecks their lives every day. My value judgment would place confiscation above the protection of unsecured creditors

Dominic Grieve: May I offer a couple of other examples? If a house is seized whose value has been improved by a local builder to the tune of £25,000, the state acquires the benefit but the builder does not get compensated for the money that he has put in. Again, what happens if a car that has not been fully paid for is seized? The state takes the car, but the person who sold the car is left with nothing because he is not secured. Surely that is the justification for the amendment that the hon. and learned Lady seeks?

Vera Baird: I repeat that that is exactly the same as what happens when a person goes bankrupt for any other reason. We are concerned not with what happens when a person has enough money to pay his debts, but with what happens when the order renders that person bankrupt. A bankrupt is bankrupt, regardless of who caused it, and a creditor should not be left in a better position because the bankrupt happens to be a criminal. There is no sense in that argument.

Mark Lazarowicz: Does not my hon. and learned Friend agree that a creditor in this situation would enjoy a benefit that is not available to others? He would benefit from what is in effect a state guarantee service, which would pay the debt. No other type of creditor has access to such a service.

Vera Baird: Creditors in the situation that has been described would either get the cast-iron benefit of the state-backed guarantee company, or there would be intolerably long arguments in court about who owed what to whom, and about what was or was not a justifiable debt. I do not accept what the hon. Member for Surrey Heath said about courts arriving at quick and simple decisions.
	Do Opposition Members really think that the courts should spend time deciding whether claims are bogus, when the only people with real information about that will be the parties to the claim—that is, the gangster and his best friend, or the gangster and some remote acquaintance arranged through that best friend? How will a court be able to get to the bottom of that puzzle simply and easily?
	Moreover, a debt might be genuine but there could be a problem with the goods—how would the court deal with that? Let us say that the police find a computer supposedly worth £10,000 in a criminal's house, but discover that it is not fit for its purpose and does not work: is there then to be a long civil trial to determine whether the goods were defective and whether the debt is really owed? The proposal is guaranteed to gum up the works.

Douglas Hogg: The hon. and learned Lady will be familiar with clause 310, where she knows full well the Bill provides that a property does not come within the class of recoverable property if it was disposed of in good faith and without notice. Those are precisely the issues that we are discussing. Is the hon. and learned Lady saying that the court cannot discharge the function under clause 310?

Vera Baird: No, I am not saying that. I am saying that what is suggested is a recipe for gumming up the works. It offers to the criminal an opportunity to do everything that he can, as soon as he feels the scent getting closer, to generate as much debt as possible.
	It is likely, is it not, that such debts which are unsecured will be small ones? It will not necessarily be the normal case that seizing a criminal's assets under the Bill will make him go bankrupt or insolvent. We are speaking of a small number of small debts which the amendment would assist. The balance of opinion in all parts of the House is clearly against the amendment, which would open the floodgates to abuse.

Nick Hawkins: Will the hon. and learned Lady consider the possibility that if the Bill becomes law in its current form, a year or so after it has come into force she may be faced in her constituency surgery in Redcar one day by a small builder who comes along and says, "I want you to take this up. I am £1,000 out of pocket for work that I did in all good faith for somebody who I had no idea was a criminal, but who has been the subject of a confiscation order under the Act." Will the hon. and learned Lady say to her constituent the builder, "I am terribly sorry. My value judgment is that it is far more important that the state should grab the money than that the innocent builder should have his £1,000"?

Vera Baird: I have explained the realities of the position, which are not as the hon. Gentleman is, I fear, pretending that they are.

Norman Baker: We heard from the Home Secretary this week how important it was that the victim should come first under the new criminal justice regime that the Government want to create. Great stress was put on that. We were told that for too long, the victims of crime had been neglected and the criminals had got away with it. Yet this afternoon, I hear many siren voices from the Government Benches clamouring to get hold of the guilty, and not very many who are keen to speak up for the innocent, and there are innocent people—

Tom Harris: rose—

Norman Baker: I have barely started, so I shall wait until I have made some progress before I give way.
	As the Minister was generous enough to accept when I intervened on him, some innocent people will be caught up and will suffer as a consequence of the Bill. For reasons that I entirely understand, the Minister fears that if the amendment were passed, it would open the floodgates to people gumming up the works—that is the phrase that has been used—and that the effect of the Bill would be diminished.
	I understand that point, and we in the Opposition must address it. Equally, the Minister must address the point that innocent people will be caught up. It is not satisfactory to brush that aside and say, "If a few bystanders are caught up in the process, that's tough." In the House, if nowhere else, we must ensure that the innocent are protected. That is a basic point of justice, which we operate in our democracy. It is no good acting as though the innocent do not count; they do count.
	How does the proposal differ from the existing situation? Let me deal with some of the points that Labour Members have made. The first difference is one of scale. The Minister said, in response to a comment from one of his colleagues, that confiscation will apply to a wide range of offenders. Indeed, the Bill is designed to be far reaching and to ensure that the proceeds of crime will be picked up wherever they can be found. Of course my colleagues and I support that principle, as do the Conservatives. So the scale of possible injustice will be greater because the scale of confiscation will be greater. That is the first point.
	The second point is about predictability. The Minister said that small builders and others who enter into arrangements with other people ought to have their eyes open and be prepared for eventualities that are unhelpful to them, and they are to some degree. However, the difference is that it will be more difficult for the small builder or another individual to pick up the fact that a calamity is about to befall him and that the debt will somehow be unsecured because the very purpose of the legislation is to catch not simply the low-life drug dealers that the hon. Member for Henley (Mr. Johnson) talked about and whom people in the community may well know. [Interruption.] Did the hon. Gentleman say that there were such people in Henley?

Ian Lucas: The hon. Gentleman said, "High life".

Norman Baker: Oh, high life. The people who undertake tasks or perform services for those people probably know that they may well have question marks over their heads, that they are identified in the community and therefore that there is a risk. However, the Bill is designed to deal with the people whom the hon. Member for Glasgow, Pollok (Mr. Davidson) wants dealt with. They are the sort of people who are City business types, who are respectable types, who have a nice house in Esher and who appear to be the pinnacle of respectability. They are the kind of people who the hon. Gentleman wants to get at. They are the kind of people who may well have a criminal lifestyle, and they will be caught for the first time. It is very good that we catch those people, but how can a small builder have a suspicion when he undertakes a massive job for a landowner with a big house in Esher that suddenly, before his very eyes, all the money will be seized because, for the first time, we have a legislative framework that will allow that to happen? He will have no way of knowing that.

Annabelle Ewing: I do not want to go over the same ground again, but the small builder in the hon. Gentleman's scenario would be at exactly the same risk as if he were to treat with a landowner whose assets were sequestrated. What is the difference?

Norman Baker: I am trying to explain the difference, and I am running through a list of points that show the difference. I have dealt with two main differences so far—scale and predictability.
	The third point is that the fact that the Minister sought to draw inappropriate parallels in responding to my intervention. He referred to the Inland Revenue and tax liabilities. He also referred to the possibility of imposing fines. I understand why he makes those points, but, with respect to the Minister, they are not appropriate analogies to make.
	First, the Inland Revenue involves a debt. We are not talking about debts, except in the purely legalistic and slight odd way in which the hon. and learned Member for Redcar (Vera Baird) did so. What we are talking about is not the same as a tax debt. Indeed, I think that the hon. Member for Cities of London and Westminster (Mr. Field) intervened earlier to make to the point that the Enterprise Bill will diminish Crown preference, so the Government are doing away with the idea that the state can automatically grab something.
	Except in extremely rare circumstances, fines are not of a magnitude to confiscate people's assets entirely. Fines involve an element of people's assets. It is an odd fine that says, "Pay over everything you have." We do not have such fines, but such confiscation may have that effect in law. So it is not fair to draw that parallel and to say that we are talking about fines.
	It has been argued that those in the enforcement authorities would be distracted because dealing with such issues is not the main part of their job. I accept that there may well be a time consequence and that it may well be significant, but that is no reason to allow a few innocent people to suffer as a consequence. I do not recognise that equation as being in any way just or appropriate in a democracy. If the Minister wants to ensure justice, he should ensure that provision is made for justice. That is a red herring, and it is wholly inappropriate for the Minister to raise that issue.
	The Minister made a serious point. He and his hon. Friends are concerned that the Lords amendment will let criminals off the hook. Other bits and pieces around the edges have been mentioned so far, but that is the nub of his argument. If someone has their Rolls-Royce seized, it will still be seized. The argument about whether the state has the benefit of that Rolls-Royce or the builder who has undertaken the work has the benefit of it will take place afterwards. For the person whose assets have been seized, that Rolls-Royce still goes. There is no benefit to him from that arrangement. Those who benefit from the proceeds of crime will still lose those proceeds under the amendment.
	It would also be possible, were the Under-Secretary concerned about the matter, to put in place a system that put an onus on the creditors to prove what was owed to them. Creditors would therefore have to bring forward to the court—were the Under-Secretary more comfortable with such an arrangement—proof that they are owed money. They would have to do that in any case, but some of the onus should be taken off the Assets Recovery Agency. They should at least have a chance, however, to say, "I have incurred work, I have put half my life over the last six months into this house", or whatever it happens to be. They should at least have a chance of saying in court or elsewhere, "I've just lost everything I had because of something that I knew nothing about. This guy has assets that you are not letting me get hold of."
	If the Under-Secretary is not happy with the amendments in their current form because he feels that they will lead to criminals using their friends or their relatives, the onus should be changed. We could examine the hurdles, consider when the provision might kick in, and perhaps limit it to one-person businesses. Let us do something at least to ensure that those innocent victims—of which there will be some under this Bill—are not affected. It cannot be beyond the wit of the Under- Secretary and his officials to construct a scenario in which the criminal is not given gaping holes through which to walk, but in which, at the same time, the innocent are not persecuted and deprived of what is rightfully theirs.

Ian Davidson: I want to raise the question of whether this proposal is genuinely being put forward by the criminal's friends. We should judge that on the basis of whether, if the proposal were passed, criminals would be more or less likely to enjoy their ill-gotten assets, and whether they would be more or less likely to be able to hold on to some of them.
	It seems perfectly clear that the thrust of the proposal would benefit the criminals whom we seek to pursue. I have been impressed by the way in which the lawyers among the Opposition have been able to find loopholes through which people can hide money away. That seems to be the role of the lawyer in these circumstances. As was indicated earlier, money could be hidden in a variety of ingenious ways, which are almost deliberately designed to clog up the machinery.
	I heard from the Opposition some tears of grief for innocent tradesmen, which I had not thought was generally typical of them. Will they clarify what is a small creditor? We have heard no such definition. What worries me is that it is not just the man who is owed money for a couple of bottles of milk. We have already heard reference to building contractors; indeed, the hon. Member for Lewes (Norman Baker) commented on the possibility of massive building work being included. Clearly, the door that the Opposition are seeking to open for small creditors could easily be opened widely to encompass almost any creditor. The Opposition's case is greatly diminished by the lack of mention of a maximum figure. Nor have they mentioned or acknowledged the potential for abuse.
	I accept that it is possible—

Ian Lucas: rose—

Ian Davidson: I would prefer not to take interventions, as we have had two major statements this afternoon. We are therefore left without much time to debate these matters.
	I accept that there is a difference between bogus and artificially created debts. It is entirely possible, however, for debts to be created that are not artificial and bogus but are the product of spending sprees undertaken by people who know that they are likely to be found guilty, and who know that they are likely to have all their assets seized. Those debts would be genuine, but, none the less, they are created in a way that is deliberately designed to thwart the means of this Bill.
	As I said, it is a matter of going out on spending sprees, buying consumables and clothes and giving away presents. Some of those could be chased up at great personal expense, but none the less it gives a green light to abuses. Although some innocent people might be damaged by the measure, I cannot think of any other proposal that will not be abused by lawyers to clog up the machinery and to benefit the criminals. I hope that the House rejects the Lords amendment.

Douglas Hogg: The fact that we are hurrying on with the debate and many of the amendments will not be discussed shows the evil associated with timetable motions.
	My right hon. and hon. Friends are on the side of the victim this time. Yesterday the Home Secretary told us that the criminal justice system should be attuned to take account of the interests of the victim. That is what the Lords amendment would do and it is what my hon. Friends, supported by the Liberal Democrats, want to achieve. The question is where the loss should fall in the event of a confiscation order being made. We are being asked to prefer the interests of the state to the interests of the innocent supplier of goods and services. In all conscience, I cannot understand why the interests of the state should be preferred to the interests of the innocent supplier. Indeed, that protection is enshrined in the Bill and other legislation.
	Clause 310 protects an innocent acquirer of property for value. The hon. and learned Member for Redcar (Vera Baird) asked why we should preserve the little person. The answer is that the innocent purchaser is preserved under clause 310. She also said—although I had difficulty understanding her argument, coming from an accomplished lawyer, as I am sure she is—that courts could not distinguish the bogus from the genuine. Yet the courts have to do that in a large number of cases. Indeed, they are expected to do that under clause 310 and its statutory predecessors.

Mark Lazarowicz: Surely the point is the extent to which the state should protect the innocent or the bogus creditor when that individual would not obtain such assistance in any other respect from the state. If a confiscation order of, say, £10,000 is made against an accused and convicted person, the court might make compensation orders of perhaps £5,000 against that individual. If it transpires that the amount stipulated in the confiscation order cannot be collected, the state will end up paying out a greater sum in compensation than it recovers from confiscated assets. Does not that give those creditors an unfair advantage?

Douglas Hogg: That point was covered when my hon. Friend the Member for Beaconsfield (Mr. Grieve) intervened on the hon. and learned Member for Redcar. What happens when a builder comes to the hon. Gentleman and says, "Look. I cannot recover the charges I want to make for repairing the plumbing because a compensation order has been made and there is no money available"? I do not suppose he will say, "Tough luck. I thought that decision was in the strategic interest of the country." Indeed, what he will say is, "I am extraordinarily sorry. I will write to the Minister and do what I can to help."
	I can give another example that is little closer to the Labour party. My hon. Friend the Member for Henley (Mr. Johnson) referred to Maxwell's pensioners. He was right. Those pensioners could have claimed against Mr. Maxwell for fraud. A confiscation order could have been made against Mr. Maxwell which would have precluded him from paying the pensioners. I do not suppose that the Labour party would be saying to each and every one of the pensioners, "I am so sorry that you cannot be paid because all of the money has gone to the state." That would be the consequence of the amendment. We are saying that the little man should be protected against the state. Labour Members are saying that the state should be preferred to the little man. I know on which side I am.

Bob Ainsworth: The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) is obsessed with comparisons with clause 310. If he reads the Bill carefully, I hope that he will recognise that that clause deals with people who are already in possession of property that they bought for full value. I do not know whether in his dealings with the law he has ever come across a situation where people are seriously suggesting that unsecured creditors should be dealt with in the same way and given the same level of protection as the possessors of property. I do not know whether the right hon. and learned Gentleman has ever argued that in a court of law. However, that is not the position of unsecured creditors, and he knows that. His attempts to make comparisons with clause 310 are fallacious for that reason. The Bill protects victims, and it also protects the victims of crime. As hon. Members know, we changed the Bill so that we could pay compensation orders ahead of confiscation orders.
	There is little doubt that there are two fundamental issues. The hon. Member for Surrey Heath (Mr. Hawkins) almost begs me to accept that his intentions are wholly honourable and that he is trying only to protect the innocent. Yet he failed entirely to deal with the issue, as did the hon. Member for Lewes (Norman Baker). The issue is how we protect ourselves from abuse. The creditor and the debtor would be able to collude in the fabrication of evidence that a debt existed. It would be in the interest of both of them to do so. Yet Opposition Members suggest that there is a simple way in which we could protect ourselves from that situation. There is not such a solution. It would be massively difficult so to protect ourselves. Confiscation proceedings would be rendered impossible to operate.
	Let us say that the hon. Member for Surrey Heath loans me money. If I clear off to South Africa he will lose it, and that is all right. However, if it is proved that I am a serial criminal and the money is confiscated, it is being argued that the money should be returned to him. I do not see much difference between the two situations.
	Opposition Members have failed to address fundamental difficulties. How could we protect ourselves from abuse? There are risks that unsecured creditors have to protect themselves from every working day of their lives.

Dominic Grieve: Is the Minister's only objection the practical one of fear of collusion? Is there not some further issue of principle, which seemed to be hinted at by the hon. and learned Member for Redcar (Vera Baird)? I understand the hon. Gentleman's point, but I did not understand the hon. and learned Lady's. For instance, in the Scottish provision, there is protection for wives, which the Government were happy to leave in the Bill. On that basis, I assume that the Minister did not have a philosophical objection. I found it extremely unpleasant that the state had to come first in such circumstances. Is that not in itself a recognition that we are not dealing with ordinary indebtedness, taxation or anything of the kind, but a completely new system? That is why the Government should listen on this issue.

Bob Ainsworth: I have made it clear that I have two objections. I fail to see that there is a fundamental difference that applies to many people in many circumstances. I say to the hon. Members for Surrey Heath and for Beaconsfield (Mr. Grieve), but not as eloquently as would my hon. and learned Friend the Member for Redcar (Vera Baird), that if they loan me money and I go to South Africa, they will not get their money back from me but they think that somebody else should cover the debt if I end up having it confiscated.

Boris Johnson: Will the Minister give way?

Bob Ainsworth: No. I will not give way again. The big problem—the Opposition know that this is the truth—is that their proposal would wreck this part of the Bill. It is therefore quite justifiable, despite the doe eyes that the hon. Member for Surrey Heath is making, to say that this is a wrecking amendment, and I ask my hon. Friends to reject it.

Question put, That this House disagrees with the Lords in the said amendment:—
	The House divided: Ayes 253, Noes 136.

Question accordingly agreed to.
	Lords amendment disagreed to.
	Lords Amendments Nos. 10 to 17 agreed to.

Clause 22
	 — 
	Order made: reconsideration of benefit

Lords amendment: No. 18.

Anne McGuire: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 19 to 25, 28, 29, 56 to 65, 87 to 94, 97 and 98.

Anne McGuire: The amendments tackle concerns about the reconsideration provisions that the Opposition expressed at an earlier stage in our proceedings.
	As hon. Members may recall, two of the three reconsideration clauses allow the prosecutor and the director to apply for an increase in the confiscation order only when they have new evidence of the defendant's benefit. However, clauses 22, 108 and 174, which enable the prosecutor and the defendant to apply for an extension to a confiscation order that has already been made, originally contained no requirement for the evidence to be new. We accept that that is a fair point, and the amendments would make the necessary changes to the clauses.
	When we considered the amendments, we noted that it might be possible to argue that the relevant clauses do not permit more than one re-evaluation of an earlier confiscation order.

Mr. Deputy Speaker: Order. Conversations are breaking out throughout the Chamber. The House should listen to the Minister.

Anne McGuire: Thank you, Mr. Deputy Speaker.
	The effect that I described was not our intention, and the amendments would therefore make it clear in the clauses that multiple re-evaluations of earlier confiscation orders are possible.
	A similar argument—that multiple re-evaluations are not possible—could be used about clauses 23, 109 and 175, which apply when further realisable property comes to light. A similar amendment has therefore been tabled to those clauses.

Dominic Grieve: I am grateful to the Minister for taking on board the comments made in Committee. The amendment is undoubtedly a considerable improvement to the Bill and removes the possibility of sloppy practice by the agency in deciding how to deal with the recovery and confiscation process. I hope that she can reassure me that the same applies to multiple re-evaluations, which are an extremely good idea. I assume that any such further re-evaluation must be undertaken on the basis of further evidence becoming available, and not simply on the basis of the agency not having done its job properly.

Anne McGuire: I can give the hon. Gentleman that assurance.
	Lords amendment agreed to.
	Lords amendments Nos. 19 to 29 agreed to.
	Lords amendment No. 30 disagreed to.
	Lords amendments Nos. 31 to 37 agreed to.

Clause 75
	 — 
	Criminal lifestyle

Lords amendment: No. 38.

Anne McGuire: I beg to move, That the House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to consider Lords amendments Nos. 39 to 42, 68 to 72, 105 to 109, 261, 262, 265, 267, 268, 271, 278 to 280, 285 to 309, 314 to 316 and 319.

Anne McGuire: It has probably taken you longer to say that, Mr. Deputy Speaker, than it will take me to explain it.
	The amendments respond to concerns expressed in the House that the offences attracting the criminal lifestyle regime were not set out in the Bill. As hon. Members will see, new schedules 2, 4 and 5 now set out a detailed list of such offences. We have approached the list by identifying offences that are inherently acquisitive and known to generate large profits. It is striking how many of the offences in the resulting list are serious, associated with organised crime or relate to matters of immediate public concern. That underlines once again how much of the criminal activity affecting our communities is driven by the profit motive.
	It will be possible for the Secretary of State to add further offences to the list by order. In case there is any anxiety about that, I stress that the order-making power will be subject to the affirmative procedure. In addition, we have amended the test stating that a defendant who commits an offence lasting for six months or more has a criminal lifestyle. The test would theoretically have caught defendants convicted of offences from which they had not benefited. We would not wish that to be possible, because the criminal lifestyle regime is intended to catch only offenders who have been involved in acquisitive crime.
	As a whole, the amendments represent a major improvement to the Bill, and I hope that the House will agree to them.

Nick Hawkins: The Minister drew attention to the fact that, in relation to amendment No. 40 for England and Wales, amendment No. 70 for Scotland and amendment No. 107 for Northern Ireland, there is an order-making power allowing the Secretary of State and Scottish Ministers to amend by order. I am grateful to her for confirming that that is subject to the affirmative procedure, as the Opposition are always very concerned about legislation that gives Secretaries of State or Scottish Ministers power simply to amend by order without full debate in the House. Will she confirm that when such matters are debated, if Opposition Members or the Liberal Democrats wish, they can be taken on the Floor of the House?

Dominic Grieve: On a point of order, Mr. Deputy Speaker. We are now within a few seconds of ending this evening's debate, and, by virtue of the fact that we had two statements this afternoon, we are quite unable, through no fault of any of the hon. Members participating in this debate, to do justice to the issues before the House on the Lords amendments. Is this not a travesty of the procedures of the House? We are in this position because of the way in which the Government wish to spin their business through statements, which overload the programme.

David Wilshire: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I think that I can deal with that point of order. These matters have already been decided by the House, and they are not a matter for the Chair at this time.

David Wilshire: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I am not going to take any more points of order.
	It being Seven o'clock, Mr. Deputy Speaker put the Question already proposed from the Chair, pursuant to Order [this day].
	Lords amendment agreed to.
	It being after Seven o'clock, Mr. Deputy Speaker put the remaining Questions required to be put at that hour
	Lords amendments Nos. 43, 47, 66, 73, 78 and 99 disagreed to.

Clause 251
	 — 
	Proceedings for recovery orders in England and Wales or Northern Ireland

Lords amendment: No. 110.
	Motion made, and Question put, That this House disagrees with the Lords in the said amendment.— [Mrs. McGuire.]
	The House divided: Ayes 242, Noes 133.

Question accordingly agreed to.
	Lords amendment disagreed to.

Eric Forth: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I will take points of order after I have finished putting the Questions.
	Lords amendments Nos. 113 and 166 disagreed to.
	Subsequent Lords amendments agreed to [some with Special Entry].
	Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Mr. Bob Ainsworth, Norman Baker, Mr. Dominic Grieve, Mr. John Heppell, Dr. Howard Stoate and Mr. David Wilshire; Mr. Bob Ainsworth to be Chairman of the Committee; Three to be the quorum of the Committee.—[Mr. Heppell.]
	To withdraw immediately.
	Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

Eric Forth: On a point of order, Mr. Deputy Speaker. You said a few moments ago that you would take no more points of order. I am troubled about that because, as you know, in the House hon. Members are usually free to make points of order, and the Chair hears points of order. Can you help the House and help me certainly by clarifying whether there is any deeper significance in what you said, or whether it was specific to the circumstances in which you said it?

Mr. Deputy Speaker: Perhaps I can answer the right hon. Gentleman's question directly. At the point when he raised the point of order, it was the responsibility of the Chair to put all the questions necessary to be put at that time. That is laid down by the House.

David Wilshire: On a point of order, Mr. Deputy Speaker. At Prime Minister's Question Time yesterday, the Prime Minister alleged that the Conservative party was opposed to the Proceeds of Crime Bill. It is undoubtedly the case, in my opinion, that that statement was directed at our support for what is known as the Lloyd amendment. That amendment was voted on a few moments ago without any opportunity to demonstrate that the Prime Minister was completely and utterly wrong in his allegation, and that our purpose in opposing the Government today was simply to make it clear that we are trying to improve the Bill. We were denied the right to put that on the record. What remedy do we have when the Prime Minister makes allegations that are not correct?

Mr. Deputy Speaker: That is not a matter for the Chair at this point.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business) and Order [20 November 2000],
	That, at this day's sitting, the Business of the House Motion in the name of Mr. Robin Cook may be proceeded with, though opposed, until any hour.—[Dan Norris.]
	The House divided: Ayes 243, Noes 101.

Question accordingly agreed to.

Eric Forth: On a point of order, Mr. Deputy Speaker. I think that we are coming to motion 6, the Business of the House.

Mr. Deputy Speaker: Order. I am not trying to prevent the right hon. Gentleman from continuing his point of order, but we must deal with motions 4 and 5 before coming to motion 6. Does the right hon. Gentleman want to pursue his point of order now?

Eric Forth: I am seeking guidance on the conduct of motion 6, so I am content to follow your advice, Mr. Deputy Speaker.

Mr. Deputy Speaker: Perhaps we should deal with motions 4 and 5 first.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Waste From Electrical and Electronic Equipment

That this House takes note of European Union Documents No. 9923/01, amended draft Directive on waste from electrical and electronic equipment, the unnumbered Explanatory Memorandum from the Department of Trade and Industry of 15th March on the Common Position of the Council on that draft Directive, No. 10143/01, amended draft Directive on restricting the use of certain hazardous substances in electrical and electronic equipment, and the unnumbered Explanatory Memorandum from the Department of Trade and Industry of 15th March on the Common Position of the Council on that draft Directive; notes the Government's current negotiating line; and supports the Government's actions.— [Mr. Caplin.]
	Question agreed to.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Representation of the People

That the draft Representation of the People (Northern Ireland) (Amendment) Regulations 2002, which were laid before this House on 26th June, be approved.—[Mr. Caplin.]
	Question agreed to.

Eric Forth: On a point of order, Mr. Deputy Speaker. I seek your guidance and clarification. It has been suggested that motion 6 may be subject to what has come to be known as the deferred Division process, so although the debate would be held now the Division, and therefore the determination of the substance of the motion, would be taken next Wednesday, on a ballot of Members. However, the motion refers to the conduct of business on Monday. It would be bizarre if the House were to be asked to vote on the motion on Wednesday, when the business had already happened on Monday. Before we launch into debate on the motion—it has no time limit, happily, and we may have much to say about it—it would be helpful if you could resolve that oddity. I hope that you can help.

Mr. Deputy Speaker: I hope that I can. The right hon. Gentleman is correct. If the House wishes to divide on this motion, the Division will be deferred until half-past 3 next Wednesday. It is for the House to decide whether it wishes to agree to the motion.

Eric Forth: Further to that point of order, Mr. Deputy Speaker. With the greatest respect, how can that be? Only by a Division can we decide whether the House will follow the pattern of business laid down in the motion, which would allow three hours for the Adjournment debate on Monday. How will we know whether the debate should last for three hours on Monday, if we do not have the vote until Wednesday? Perhaps I am being obtuse—that is not entirely unknown—but I fail to see how we can know on Monday what substantive decision the House will make on Wednesday. If it will help you to help us, I confirm that I may ask my colleagues to test that point by dividing the House on the motion, just to see what will happen.

Mr. Deputy Speaker: It is open to the House, if it so wishes, to agree to the motion this evening without a Division, in which case the circumstances that the right hon. Gentleman outlines would not occur. With regard to the other matters that he raises, the Chair is not responsible for the wording of motions on the Order Paper or the circumstances that surround them. Perhaps that helps the right hon. Gentleman.

David Heathcoat-Amory: Further to that point of order, Mr. Deputy Speaker. This is a more serious issue than it appears. We have spotted a flaw in procedure. We know that when the Government change the constitution they seldom think about the real implications, and when the House agreed to the bizarre procedure of deferred Divisions the Government did not anticipate a case such as this. It is surely a nonsense for the House to make a decision on Wednesday about a matter that has already happened. If the House were to vote against the motion on Wednesday, it could not influence something that had happened two days earlier. That is obviously nonsense and I suggest that it is an abuse of the procedures of the House for the Government to attempt to proceed in that way. I suggest that the business managers confer urgently, with a view to withdrawing the motion, so that we may proceed in a more orderly way.

Mr. Deputy Speaker: It is not possible to withdraw the business at this time, but the Government Whip might wish to refrain from moving it. Otherwise, I cannot add to the points that I made earlier in response to the initial point of order. Of course, the House and those responsible for the matter will have heard the points that the right hon. Gentleman has made.

Nicholas Winterton: Further to that point of order, Mr. Deputy Speaker. As Chairman of the Procedure Committee, I am deeply worried by what has happened. Undoubtedly, the current procedures of the House are flawed. The House would look stupid if we went ahead with the business on Monday but then voted in a deferred Division on Wednesday that it should not take place. Is it within your power to suspend the House so that the issue can be discussed with the Leader of the House—whom I saw standing in the Chamber only a few moments ago, so he is here—to resolve the issue satisfactorily? I am not seeking to make life difficult for you, for the House or for the Government, but this nonsense should be sorted out before the House of Commons makes a fool of itself.

Michael Jack: Further to that point of order, Mr. Deputy Speaker. Given that the Parliamentary Secretary, Privy Council Office is present, would it be possible for him to assist us in resolving the matters that have been raised?

Mr. Deputy Speaker: Again, I have listened to the points made by the hon. Member for Macclesfield (Sir Nicholas Winterton) and the right hon. Member for Fylde (Mr. Jack). I am sure that the whole House will have heard them. I have no power to suspend the House, although, as I have said already, the motion could be withdrawn.

Business of the House

Ben Bradshaw: I beg to move,
	That, at the sitting on Monday 22nd July, the Motion for the adjournment of the House in the name of the Prime Minister relating to matters to be considered before the forthcoming adjournment may be proceeded with, though opposed, for three hours, and the Motion shall then lapse.
	I have just dropped my speech, Mr. Deputy Speaker, but I doubt that it will be very helpful anyway.
	It is not my job to answer points of order, but perhaps I can respond to the contents of some of the points that were raised. I defer to your better judgment, Mr. Deputy Speaker, as to what the impact would be if anyone were to call for a Division on the motion. I hope that no one does, as the motion is an attempt to guarantee that Monday's summer recess Adjournment debate is guaranteed three hours. That debate is valued by hon. Members of all parties, and none of them would want to risk letting the other business that the House has to conduct on Monday eat into the time set aside for it.
	I do not know what would happen if the motion were to be pressed to a vote—which, as you rightly said, Mr. Deputy Speaker, would be subject to a deferred Division on Wednesday evening. I defer to your wisdom and advice on procedural matters, but my guess is that the implication would be that there would be no guarantee that the summer recess Adjournment debate would get three hours.

Eric Forth: This is a fine mess, is it not, Mr. Deputy Speaker? In some ways, the benefit to the House is that we have identified an apparent flaw in the ghastly deferred Division process. I hope that, at the very least, that further thought will be given to what some of us argued from the start was a nonsense and an anomaly.
	However, that is for another day. We are now debating the substance of the motion, and I am delighted—it takes me back to the good old days—that we can do so until any hour. That is only right, as the motion raises a number of important issues.
	First, why is the motion necessary at all? The answer is readily available. Exchanges earlier today at business questions—to which I made a modest contribution—made it clear that the Government are overloading the House's business for next Monday, Tuesday and Wednesday to a ridiculous and unacceptable degree. Further, for some reason the Government have decided that the summer Adjournment debate must happen on Monday, when there is other substantial business to be disposed of.
	The Minister, in his usual open and engaging way, has said that he is here only to protect the summer Adjournment debate, but from what? The answer is that it has to be protected from the Government, as it is they who are putting pressure on the time available for that debate.

Julian Brazier: I thank my right hon. Friend for giving way. As usual, he is being extremely reasonable, but is not the situation worse than he suggests? By scheduling the summer Adjournment debate for two days before term ends, is not the Leader of the House still further undermining the topicality of that, which was supposed to be one of the gems of the so-called reforms?

Eric Forth: I am grateful to my hon. Friend. As ever, he has anticipated one of the many points that I intend to make. If my hon. Friend will forgive me, I shall return to the question why the Adjournment debate should not be held on Monday. First, I shall plough through some of the other points that I am determined to make.
	The next question is why only three hours are to be allocated to the Adjournment debate. The House has become accustomed to the fact that we often have a whole day on the end-of-term Adjournment debate, precisely for the reason that my hon. Friend points out. Those debates are often fully subscribed, because they are one of the rare occasions when right hon. and hon. Members can raise constituency or policy matters in the House and explore them in a relatively relaxed way—something that we all value highly.

Bob Spink: My right hon. Friend is absolutely right in what he says. A number of usual suspects attend the Adjournment debates—I am one of them. There are usually 20 to 30 of us. We like to air important topical issues that concern our constituencies. The debates are an important part of the annual parliamentary diary, and it would be outrageous for the Government to seek to curtail the power of individual MPs to bring before the House matters that concern them in their constituencies.

Eric Forth: A number of unusual suspects also turn up for the debates, in my experience. My hon. Friend makes a proper point: why only three hours? If the Minister boasts, as he did a few moments ago, that the motion was a benign move to protect the business, and that the Government were generously giving the House a whole three hours for the Adjournment debate, the obvious question to the Minister, which I hope he can answer, is why are the Government giving us only three hours? Why can we not have five hours or even more than that?

Andrew Turner: Can my right hon. Friend assist me as a relative newcomer to this place, and tell me whether there are any conventions about the length of speeches that might be made from the Back Benches or from the Front Benches in that important debate? I certainly have a number of issues that I should like to deal with at some length, were I lucky enough to catch the Speaker's eye on that occasion.

Eric Forth: It is fair to say that the Speaker has never yet exercised his prerogative to limit the time for such speeches. The debate is one of the occasions on which the House exercises its own self-discipline, and admirably so. Hon. Members can come along and make brief or occasionally not-so-brief contributions, depending on the importance of the subject matter.

David Burnside: As a relative newcomer who is gaining a little experience, I spoke in the Adjournment debate at the end of the last Session. My party and right hon. and hon. Members are expecting a very important statement from the Prime Minister by 24 July—the day the House plans to rise. It may be in response to a question, or it may be a statement followed by a statement from the Secretary of State for Northern Ireland on the state of the peace process in Northern Ireland. I had hoped to have an opportunity in the Adjournment debate to comment on behalf of my constituents on a very important statement on Northern Ireland. Why are we having the Adjournment debate on Monday, rather than at the end of the Session on Wednesday?

Eric Forth: My hon. Friend makes a good point, which relates to the point made by our hon. Friend the Member for Canterbury (Mr. Brazier) a few moments ago: why choose Monday? Is that a cock-up or a conspiracy? We keep having to ask that question about the Government. I suspect that in this case, it is probably a bit of both. The comments of my hon. Friend the Member for South Antrim (David Burnside) rather indicate that the Government may have something to hide, or that there is something of which they are afraid, and that they want to get the Adjournment debate tucked neatly out of the way on Monday, before hon. Members start worrying about such an important matter.

George Osborne: As a relative newcomer, may I draw on my right hon. Friend's experience in the House? On how many occasions can he recall the Adjournment debate not being on the last day of the parliamentary term?

Eric Forth: I would say, at a guess, that that is pretty unusual; the convention has been that such debates are held at the end of term, so why are we forced to hold the debate on Monday? The Government have got us and themselves into difficulty by insisting that the debate take place on Monday, rather than on Tuesday or Wednesday. That brings me to another point altogether: why choose Monday, Tuesday or even Wednesday?
	Earlier today in a different context, we said that the Opposition would be more than happy, even at this late date, if the business managers suggested that the House may want to sit for an extra day or two to debate, for example, foot and mouth disease matters or, as we now discover, to have a proper, full-day Adjournment debate. What is wrong with that? Why are the Government in such indecent haste for the House to rise for the summer recess when it is now becoming perfectly obvious that there are more and more important matters to be dealt with?

Bob Spink: Perhaps I can help my right hon. Friend. There is good reason for the motion. It is not a cock-up, but a conspiracy because an important announcement will be made on Tuesday regarding airport planning in south-east England. I am sure that a number of hon. Members, including myself and those with constituencies in Southend and Kent and even Labour Members, such as the hon. Members for Thurrock (Andrew Mackinlay) and for Basildon (Angela Smith), may wish to raise that issue on the Adjournment. So I agree with my right hon. Friend. Why should not the House sit for an extra day on Thursday to debate those important matters?

Eric Forth: We are now getting to the bottom of things, which shows the value of such debates, does it not?—as if we needed to demonstrate the value of debate. We are now beginning to shine some light on the fact that the Government hope and expect to get that rather inconvenient Adjournment debate out of the way on Monday and then some very controversial and important matters will be brought before the House in statements on Tuesday and Wednesday. However, there will be no opportunity for right hon. and hon. Members to consider those matters further and perhaps in more detail in the Adjournment debate, which we would normally expect to occur at the very end of term. I hope that the Minister will be able to answer another question when this debate finally finishes, which, given the level of interest that I detect in the Chamber, may yet take some little time.

Martin Smyth: The right hon. Gentleman mentions a conspiracy. We are told that there are no such things as conspiracies, but I have worked out my own theory: some conspiracies are moved on by cock-ups. Perhaps that is what has happened. However, there is a more serious aspect. Is it because the Government have such a large majority that they believe that they can do anything without considering any opposition? Is there not a possibility that a precedent will be set? In future, we may be asked to take such a decision about something other than the Adjournment debate. We must look very carefully at the procedures of the House so that such things do not happen again.

Eric Forth: Of course my hon. Friend, who has great experience in the House, puts his finger on the problem. I wish that we could look at the procedures again. In fact, I think that we will be forced to do so, because the truth is that we have now discovered a flaw in the deferred Division process that will have to be considered and sorted out pretty quickly.
	I certainly will ask for my hon. Friends' support in opposing the motion at the end of the debate, if only to find out what will happen as a result. Unless the Minister gives us a very satisfactory explanation for the questions that I have asked, I am not inclined to agree to the motion any way. We have a series of questions. Why only three hours? Why on Monday? Why cannot we sit for an extra day to allow the Adjournment debate to be a proper length?

Roy Beggs: If we are to provide such an opportunity for hon. Members, should we not even consider starting at half-past 9 on Wednesday to afford more time at the end of the day?

Eric Forth: I am grateful to my hon. Friend for that constructive suggestion. We are full of constructive suggestions, and I hope that the Minister has been listening to them because we are trying to be helpful. However, the Government probably do not want to be helped in this case.
	I wish to make a final point. If we allow this motion to go through unchallenged this evening, what worries me is that it will give the Government the idea that they can start to bring these Adjournment debates further and further forward, and bring on unpleasant and controversial business afterwards, thus denying Members the opportunity to use the Adjournment debate further to explore the unpleasant matters that the Government hope to conceal or semi-conceal. The motion has therefore turned out to be a nasty little measure. Furthermore, it has turned out to be flawed. The procedure is flawed, and the Government have put the House in an absurd position. Somehow, we must work our way out of it.
	I hope that the Minister will be able to give some helpful responses, but, nevertheless, we owe it to ourselves and to the House not to agree to the motion in the terms in which it is put. We can, therefore, force a review of the procedure and find out what is the truth behind it: is it a conspiracy or sheer incompetence? In that respect, it will have served one purpose, if nothing else.

Michael Jack: I want to say two things. First, I was distressed and saddened that the Minister, in his introductory remarks, failed to justify the terms of this particular motion. He could see that Members were troubled—they were rising on points of order—and he even told the House that he did not think that his remarks would be of much use anyway. He failed to explain to us the construction of the business now before us.
	Secondly, my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) was entirely right to point out that, traditionally, this Adjournment debate has run for more than three hours. I totted up the subjects for debate had I wanted to participate in it—I still have not made up my mind on that. There are questions to deal with in relation to the Eurofighter, the lack of computerised tomography scanners in our local hospital, the state of the west coast main line, the state of agriculture in the north-west, some remarks on Uganda and India, the delivery of public services, the use of laptop computers in Committees of the House, and a matter concerning taxation. I could have happily occupied 100 minutes on those subjects. Given that only three hours may be available, I would not do so in the interests of other Members. As many subjects could be raised, however, I hope that when the Minister winds up this debate, he will explain the paucity of time and the mess of this motion.

Ben Bradshaw: I hope that I can help right hon. and hon. Members with the questions that they have raised. I did not mean to be rude to any hon. Member, as I thought that there would be an opportunity to make points anyway, and that I would reply to them in my answers now.
	The right hon. Member for Bromley and Chislehurst (Mr. Forth) asked, as did other Members in interventions, why this motion is necessary. We believe that it is necessary if Members on both sides of the House want to guarantee that there will be three hours for the Adjournment debate on the recess. The consequence of not passing the motion may be that we have longer, but it may also be that we have shorter, or even no time at all.
	The right hon. Gentleman suggested that we were being over-burdened on Monday. We have two other main pieces of business to consider on Monday. One is the Mobile Telephones (Re-programming) Bill, which I hope that all Members accept is important. It is not terribly contentious, and it should not take up too much of the House's time.

Eric Forth: It might.

Ben Bradshaw: As the right hon. Gentleman rightly says from a sedentary position, however, it might, which is exactly why the Government are bringing this business motion to the House today. If the debate goes on for some time, the motion will guarantee that the Adjournment debate on the recess has at least three hours.
	The other piece of business that we must consider on Monday is the debate on the restructuring of Select Committees. Again, that is an important piece of business, and I would expect Members on both sides of the House to feel that we need to get on with it, so that the Committees can get on with their work. It should not be too contentious, but one never knows. There has been debate on it in the past, and that is why the Government want to make sure that, in the event that those debates run on, we have three hours for the Adjournment debate.

Bob Spink: rose—

Ben Bradshaw: If I do not address the point that the hon. Gentleman wants to raise, I will give way to him in a second.
	Let me address the issue of the three-hour limit. It is not the tradition for the House to have an Adjournment debate that is longer than three hours. Between 1982 and 1995—so for the vast majority of the time of the previous Conservative Government—there was a three-hour limit on the debate.

Bob Spink: If I can correct the Minister, three important items will be discussed on Monday. The Adjournment debate at the end of our proceedings is on education in Castle Point.

Ben Bradshaw: I beg the hon. Gentleman's pardon. I accept that that is an important issue for him and his constituents.

Eric Forth: For the sake of completeness, the Minister will know that the Leader of the House told us—rather unusually, but I am grateful to him—that there will be a statement on Monday on the Anderson report on foot and mouth, which I suspect the Chair will allow to run for some time. So there is a substantial statement, a Second Reading, which could be controversial—we never know in advance—and at least one political party will have a lot to say about setting up Select Committees because it is annoyed that it is not chairing at least one of them.

Ben Bradshaw: We will face those issues on Monday, but they demonstrate why the Government are so keen to protect the three hours for the Adjournment debate on the recess. I know how much the right hon. Gentleman likes to sit late in the House and if the motion is passed we can sit into the early hours of Tuesday morning to 1.30 am. If we do not pass it we might have no debate on the Adjournment and the business will finish at 10 pm.
	I have dealt with the three-hour limit. It was in place in the House between 1982 and 1995. It only changed when the Adjournment debate on the recess was moved to Wednesday mornings. Hon. Members will be aware that that has been discontinued because of the introduction of Westminster Hall debates. It is also not the case that the Adjournment debate on the recess has always taken place on the last day of Parliament. We have allocated time on Monday for it because we will be busy on Wednesday receiving messages from the Lords, which might mean sitting late into the night.
	The motion is not about a conspiracy or, dare I say it, cock-ups. It is simply about trying to ensure for the convenience of hon. Members that the traditional end of term Adjournment debate, which they value so highly, is protected. I hope that hon. Members support the motion.

Mr. Deputy Speaker: The Question is as on the Order Paper.

Hon. Members: No.
	Division deferred till Wednesday 24 July, pursuant to Order [28 June 2001].

GARMENT MANUFACTURING (WALES)

Motion made, and Question proposed, That this House do now adjourn.—[Joan Ryan.]

Simon Thomas: I was fortunate in securing the Adjournment debate tonight on an issue of great importance to my constituency and west Wales. I did not realise how prescient it would be, but just three hours ago it was announced that the Dewhirst factory, which manufactures ladieswear, was going to close. That has left 350 workers in Cardigan feeling utter despair. I share their despair and, as their Member of Parliament, I also feel helpless.
	It is a private company that has decided, for profit reasons, to relocate outside the European Union. There is little that I or the Minister can do. Indeed, there is little that the National Assembly Executive can do. However, the closure raises wider issues that relate to manufacturing in Wales, especially the garment manufacturing industry, and to how we can provide a future for the skilled work force at Dewhirst in Cardigan. That is where I, as the constituency Member for Ceredigion, want to turn my attention. I hope to receive some words of comfort and support from the Minister.
	As I have said, the announcement was made about three hours ago. The first inklings that we had that the Cardigan factory might be under serious threat came when Dewhirst shut its Fforest Fach, Swansea, operations a couple months ago. I immediately requested a meeting with the managing director of the Dewhirst factory in Cardigan to explore with him what the future would be there. That meeting took place on 14 June with Mr. Stan Liptrot, who is the managing director, and Mike Jones, who is the financial director.
	At that meeting, I was told how dark and bleak the future for Dewhirst in Cardigan would be. It should be put on the record that this is no reflection on the workers, who have been magnificent in responding to the challenges placed on them. Mr. Liptrot told me that they were the best work force in the Dewhirst group—the most hard working, efficient, effective, flexible and adaptable, as well as the most skilled and the least wasteful.
	One of the great ironies—a horrid and grotesque irony—is that many members of the Cardigan work force have been travelling to Morocco to help Dewhirst set up its factory there and to help train the workers, only to see their jobs being transferred wholesale to factories in Morocco and Turkey. We have exported our technology, as we might expect, and the knowledge of the work force to those countries outside the European Union, only to see our jobs being exported likewise, with the company coming face to face with the fact that it is cheaper to employ people in factories in places such as Morocco and Turkey.
	I thought at the time that perhaps something could be said about this—something about the strength of the pound, investment, requests for guarantees; perhaps something that the National Assembly could do, or something on the wider political scale that I could do as a Member. But it seems not. The strength of the pound affects manufacturing, but in this instance it would make no difference if we went into the euro tomorrow.
	The manufacturing of jeans, which is what happens at Cardigan for Marks and Spencer, has changed because fashions change. Fashions come and go. Unfortunately, in fashion at the moment are jeans that are painted by hand, cut in a certain way, ripped in a certain way or decorated with sequins, stars or whatever. They are attractive, popular and trendy, but it takes time to make jeans of that sort. It involves not only machine cutting but adding things, and that is a hand job; and a hand job can be done very effectively and efficiently in Cardigan, but not cost-effectively for the company. It is cheaper to do it in Morocco. That is despite the fact that I was assured that the waste and lack of standards in Morocco and Turkey were much greater. Wastefulness is to be seen in those countries. Nevertheless, that has not helped the Cardigan work force.
	I wish to put on record my sympathy and deep understanding of the future that the workers and their families in Cardigan face, especially given that the factory employs many women. The jobs are reasonably well paid for the low-wage economy that we have in Cardigan. Many of the women are the main breadwinners for their families. Many of them have family members who are engaged in agriculture or tourism, areas of work that do not have secure futures at the moment.
	The factory was put on a weekly review, and I am sorry to see that that review has revealed Dewhirst's decision to close the factory. When I met the trade unions and the representatives, including Bridget Campbell of the GMB, on Monday, I was struck by their spirit and determination. However, they also knew that an announcement would be coming soon, but I do not think that anyone expected it this week. The announcement was couched in these words:
	"The group has today regrettable announced the proposed closure of its Cardigan factory with the loss of approximately 325 jobs in Cardigan and 10 supporting jobs elsewhere . . . This is a direct result of continued consumer pressure on prices that has led to insufficient profitable business being available to maintain UK manufacturing at current levels."
	In many respects, that bald and bleak statement has ended 250 years of garment manufacturing in the Teifi valley. The Teifi valley was once known as the Huddersfield of Wales and was the centre of the Welsh woollens manufacturing industry. Dewhirst was the main inheritor of that tradition of manufacturing. The impact of the closure would be similar to the closure of a steelworks or a coal mine. Cardigan is a one-factory town in many respects.
	The history of woollens and clothes manufacturing in the Teifi valley is even longer than the history of steelmaking or coal. It predates the industrial revolution, driven by steel and coal; it came from the earliest industrial revolution, driven by the water power of the river Teifi.
	Some small niche manufacturers remain in the Teifi valley and some important museums remain there. I am sure that one or two jobs will be found for skilled machinists with those niche manufacturers. However, the vast majority of the 350 workers—I think it is slightly more than the 325 mentioned in the statement; until recently, 380 people were employed at Dewhirst—will go straight to the jobcentre.
	Current unemployment in the Cardigan travel-to-work area is 297, representing 3.2 per cent. That is the claimant count, not the measure of the non-employed or non- working part of the population. However, the loss of what I estimate to be up to 380 jobs—not including the knock-on effects—will mean that overnight the claimant count will rise to 677, a 7.3 per cent unemployment rate according to the claimant count. In other words, unemployment in the Cardigan travel-to-work area, which straddles both sides of the Teifi valley, will virtually double overnight.
	I do not think that there are many jobs available. I heard a story on Monday about a young man who was made redundant by Dewhirst. For four days, he went to the jobcentre in Cardigan, only to be offered one job, working at night in a bar. That was all that was available to him in Cardigan at that time. What will happen when more than 300 people go to the jobcentre and make similar requests?
	On Monday, I heard a story that indicates the shock that will come to the town shortly. The union rep, Bridget Campbell, was at the hairdressers in Cardigan, and was talking about the difficulties with Dewhirst and her fears for the future. The hairdressers blithely said that it would not affect her business. Bridget Campbell looked around and saw several ladies in the hairdressers, all of whom were employed by Dewhirst. She told me that one of the first things to go when one loses one's job is the luxury items, such as having one's hair done every week or month. Many businesses will see the effects of that shortly.
	Mortgages will be difficult to pay, and hairdressers and travel agents will be affected. The factory is about to shut down for its fortnight's holiday and many people have committed themselves—perhaps through borrowing—to go away for the fortnight. They will face an uncertain future when they come back from holiday.
	The Minister, who is from the south Wales valleys, does not need me to tell him how quickly some of our towns can die when a major manufacturer leaves. The flower shops, hairdressers and other upmarket shops close first. Grocery stores will experience difficulties next. I wonder what will happen to Tesco, the main store in Cardigan. Will the sort of goods that it sells get a receptive audience now with so many people reliant on benefits—if only for a short period of time, I hope? We can foresee our town entering a distressing spiral into difficulty with so many jobs being lost so quickly.
	Having accepted the devastation in Cardigan, we must find a way forward to create and secure new jobs for those skilled workers. I am not asking for some sort of intervention to help a private company that was clearly going to go. It is a bit late to do that anyway because of the announcement, but I would not have asked for such intervention. The company decided that £23 million of profit last year was not good enough and that it wanted to make even more profits. What distresses me is that the company will still be listed as a UK company, even though the vast majority of its manufacturing will be done abroad. It also distresses me that Marks and Spencer—which has done so much to support UK businesses over many years—now makes as little as 20 per cent. of its goods in the UK. Marks and Spencer's profits have soared, but on the back of exporting jobs out of the United Kingdom.
	The Minister knows that I have described only the latest blow to garment manufacturing in Wales. The trouble started in 1998, when Dewhirst cut 300 jobs in Ystalyfera. Last year, 165 jobs were lost in Lampeter in my constituency. We barely managed to cope with that. Some of those affected in Lampeter came to Cardigan to work, and they face redundancy for the second time in two years. Recently, 435 jobs were recently lost in Fforest Fach in Swansea, and now the decision has been made to cut 350 to 380 jobs in Cardigan.
	One company accounts for the loss of 1,200 jobs in the garment manufacturing sector in Wales in the past three years. That is disastrous. A sector that was once so important for manufacturing—one of the few genuine success stories of manufacturing in mid and rural Wales—is on its uppers and has almost ceased to exist.
	Given that the Dewhirst decision is based on access to much lower labour costs, it is unlikely that the clothing sector will provide new employment opportunities. We should aim for that, and try to support companies that are involved in garment manufacturing. However, when I met the Welsh Development Agency to discuss what we could do for the skilled workers at Dewhirst, it said that it did not expect to place more than a handful of people with local garment manufacturers because the jobs were simply not there.
	I want to conclude with some wider points. First, what are the Government doing to secure a UK procurement policy? It is a pity that we are running away from placing contracts with UK companies, such as garment manufacturers. For example, there was a recent outcry about placing Ministry of Defence contracts for boots and uniforms with a German manufacturer. What has been done to tighten up and improve access for our companies in procurement policy? I understand the European Community directive, but I also note that other companies, especially in France, get around that.
	The Government will doubtless point to the taskforce approach that has been used in Fforest Fach to date. Although I would welcome the presence of a taskforce to help Dewhirst workers who have been made redundant to find new jobs, the position in Cardigan is different from that in Swansea, where there are other employment opportunities, manufacturers and large employers. There is no other single employer in the Cardigan area. Indeed, there is no other large manufacturer in my constituency. We have Aberporth, but that project is taking on no new people at the moment.
	I should like the Minister to explore with Andrew Davies, the Assembly Minister for Economic Development, the possibility of adapting an idea from England to Wales. In Prime Minister's questions, we hear much about urban regeneration companies. I understand that the experiment has been successful and that the companies have been a good vehicle for regeneration in England. There is now talk in England of rural regeneration companies. Perhaps it is time for us to consider useful vehicles to regenerate the town of Cardigan and create new jobs for the workers who are now being made unemployed. We need a better vehicle for investment in the town than a piecemeal, agency-based approach.
	The Minister has visited the Aberporth development and he knows that the proposals are exciting. However, he also knows that they are some way down in the line and that planning permission will not be determined till September. Objective 1 is a long process. I therefore hope that the Minister will give us some comfort by saying that, as a matter of urgency, he will work with the WDA and the Minister for Economic Development in the National Assembly to put a taskforce and resources in place to create the new job opportunities that are needed in Cardigan.
	The union representative whom I met on Monday said, "As an Englishman, I say that your language is going to die unless you can get jobs in this area for your young people." That problem faces both me as a constituency Member of Parliament and the Minister as someone who represents the Welsh government.

Jackie Lawrence: Thank you—

Mr. Deputy Speaker: Order. Has the hon. Lady informed the occupant of the Chair that she has the permission of the hon. Member for Ceredigion (Mr. Thomas) and the Minister to contribute to the debate?

Jackie Lawrence: Indeed I have, Mr. Deputy Speaker.
	I should like to thank the hon. Member for Ceredigion (Mr. Thomas) for allowing me to take two minutes of his debate, as I have a constituency interest. The factory at Cardigan to which he referred employs many of my constituents from north Pembrokeshire. He spoke comprehensively about the effect that the closure will have in his constituency and I shall not repeat any of the details that he raised; but I have another concern, as the company has another outlet in Fishguard in my constituency that employs a further 120 people.
	Like the hon. Gentleman, who has been in contact with the factory in Cardigan, I have been in touch with Fishguard, which was under monthly review only 18 months ago, when Marks and Spencer was having difficulties. It got out of those difficulties, the reviews stopped and we thought that things could be looking better. However, the fact that the plants at Cardigan, Lampeter and Swansea have closed is of concern to my constituents, many of whose families have worked for Dewhirst for generations—their fathers, grandfathers and grandmothers have worked for the company.
	As the hon. Gentleman said, the Minister can probably do very little in terms of the commercial considerations that are involved. I spoke today to Terry Jones from the company, who made it clear that Cardigan and Fishguard are highly efficient and have been well invested in. That is not the problem, however. The difficulty relates to market prices, competition, the fact that a pair of jeans costs less now then 15 years ago, and competitors outsourcing abroad.
	The company is left with a choice and we are seeing the human consequences. The Government can probably do little about that, but on behalf of my constituents in Fishguard, in addition to those who worked in the Ceredigion factory, I ask the Minister please to ensure that Team Wales is immediately involved. It was put in in respect of ITV Digital in the south of our county. Can it be put in posthaste not only to look at Ceredigion, but with regard to my fears about the potential knock-on effect for Fishguard in my constituency?

Don Touhig: It is usual on these occasions to congratulate an hon. Member on securing the debate, but I am sure I share with the hon. Member for Ceredigion (Mr. Thomas) the wish that we were not having this debate at all. I very much regret the fact that Dewhirst this afternoon gave its staff at Cardigan notice that the plant would be closing in the autumn. That is a heavy blow to the community and in excess of 300 jobs will be lost as a consequence. He made clear the knock-on effects in the wider Cardigan community, and not only for the families of those involved.
	I can tell the hon. Gentleman that my officials have already been in touch with Assembly officials. I know that the Assembly, working together with the Welsh Development Agency, Education and Learning Wales, the Employment Service and other key agencies, will do everything that it possibly can to mitigate the effects of the closure and the job losses. Today's announcement also raises fears for the future of the Dewhirst plant in Fishguard, to which my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) referred. I sincerely hope that the management of the company will find a way to retain its presence there and retain the jobs.
	It might be helpful for me to tell the House what steps were taken when Dewhirst closed its plant at Swansea, when a very effective Team Wales approach helped to mitigate some of the problems. Following the announcement, a meeting was immediately set up, including representatives of the Welsh Development Agency, the city and county of Swansea, ELWa, the Employment Service and the Assembly. A strategic overview of the Dewhirst situation was issued by the company and a response in terms of what various parties could do to assist matters was then provided to Dewhirst. The main thrust of the group to which I referred was the setting up of a human resource action group, which first met to discuss the ongoing skills audit and the demographic information that is emanating from Dewhirst. That is of key importance; when jobs were lost in my constituency, one of the key things that helped us to find replacements was a skilled audit carried out by the local employment agency. We found that most helpful in getting people into work.
	It is worth mentioning that Swansea college and ELWa are working together to provide basic IT skill provision and detailed job search. A matching exercise is currently under way to ensure that the redundant Dewhirst workers are given every opportunity to find alternative work. ELWa is working very hard to prepare user-friendly packs relating to the redundancy action plan, and the city and county of Swansea are currently preparing a presentation on local learning provision in order to share that information with the work force. I would hope that we will be able to persuade them; I am sure that we will, because I have met the hon. Gentleman and representatives of Ceredigion council, and I know how proactive they will be in response to this blow. Now that further redundancies have been announced, I believe that the effective Team Wales approach that has already been developed will help to mitigate some of the consequences of these job losses.
	The hon. Gentleman referred to the urban regeneration companies that have been set up in other parts of the country. He makes a good point, and I certainly undertake to raise the matter with my colleague, the Assembly Minister responsible for economic development. The hon. Gentleman and I were at Aberporth recently, and if anything makes this issue more vital, it is this news today, because there is great potential for regenerating that part of west Wales and Ceredigion and helping to find work for those who have lost their jobs today.
	The Government and the WDA are working together to support the garment industry. Since 1997, the Government have made £80 million available to the industry across the UK in the form of capital investment, export promotion, research and development, innovation support, retraining, and regional support. In 2000–01, the Department of Trade and Industry invested about £8 million, which was focused principally on the technical textiles market, employment and training opportunities, help for the supply chain, design skills, the benefits of e-commerce, and export support. On support for exports, Trade Partners UK has relaxed its rules so as to allow textile industries to receive assistance to participate in more than three events.
	The WDA has two major initiatives to support the garment and textile industry. The first is the WDA's garment and textile sourcing programme, in which Welsh manufacturers are introduced to new supply opportunities and encouraged to develop new customers. Since the sourcing programme was piloted in 1995, Welsh suppliers have been introduced to new sales opportunities valued at more than £60 million, which is most welcome. A wide range of companies have benefited from the programme, ranging from one-person, designer-based businesses, through cut, make and trim companies, to larger manufacturers. The service is completely free to both buyer and supplier.
	The second initiative is the WDA's company development programme. The WDA recognised, as far back as 1997, that some companies required assistance to improve their competitiveness. This programme provides participating businesses with new skills, and with knowledge and experience of management, manufacturing and marketing processes. It is important to recognise that the garment industry in Wales is important; there are more than 30 companies in this sector in Ceredigion and Pembrokeshire alone. The hon. Gentleman referred to some of them in his speech. They are small and medium-sized companies, ranging from those engaged in the traditional woollen industry through those that focus on bridalwear, sportswear, knitwear and home furnishings, to specialist suppliers of naturally coloured rare breed wool, luxury mohair wool, silk blends and organic wools. There is a whole range of small companies there.
	The Government recognise that it has been particularly tough for manufacturers in the last year or so, owing to the economic slowdown in the world economy and weakness of the euro. That, of course, is not confined to Wales; it hits the whole of the UK. There are signs, however, that manufacturing industry is becoming more confident. The latest Confederation of British Industry and Engineering Employers Federation surveys point to stabilisation in manufacturing output over the next three to four months, and only today I noticed that the South Wales Chamber Group has said that a number of companies are predicting an increase in profits and showing greater confidence for the next year.
	The hon. Gentleman is looking for help from the Government for the immediate problems in his constituency, and I will certainly take on board the issue of procurement policy. I shall make some inquiries on that matter and write back to him as quickly as I possibly can. I would also commend the work done by the all-party clothing, textiles and footwear group, which has had the opportunity to study the "Making it Happen" report issued by DTI Ministers a while ago.
	I am pointing these things out because it is important to recognise that, although we have had this awful blow today, not everything is bleak in the economy in Wales. There are opportunities, and I see Aberporth in the hon. Gentleman's constituency as an exciting opportunity. It is right to point out that some good things are happening, and we must ensure that the people who are losing their jobs at Aberporth can benefit from new job opportunities. Our first thoughts must be with those people who are faced with redundancy today. That is what I believe Team Wales will take on board. I shall certainly take on board the remarks of the hon. Gentleman and my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) and follow them up.
	We must seek new job opportunities for those who are losing their jobs and we must find opportunities for them to retrain and upskill. I sense the sadness in the hon. Gentleman's remarks, and he is desperately keen to get back to his constituency to do whatever he can to help, but I want him to know that the Secretary of State and I will do everything we can to help in any way possible. Please be assured that we are just at the end of a telephone line. If there is anything he comes across in the next day or so that he thinks the Wales Office can help with, we will certainly do all we can.
	I want the hon. Gentleman to convey this to his constituents, because there is nothing lonelier for an individual, a family or a community than job losses and, perhaps, despair over where they should turn to, especially as there is high unemployment in the town of Cardigan. I want to ensure that we send that message out to people: we as the Government, the hon. Gentleman as the constituency Member of Parliament, and all the agencies will do everything they possibly can to help those people to get back into a job as quickly as possible. We face a difficult time in parts of our economy in Wales, and this is a blow to an area of Wales where we have high hopes for a brighter economic future.
	The hon. Gentleman also touched on an important issue, which I know is close to his heart: the impact that the closure might have on the language. He and I discussed the Aberporth project when I was down there, and we agreed that the investment in Aberporth and the realisation of the project would help to deal with some worries that he, I and other Members have about how we protect Welsh-speaking communities by ensuring that there are jobs, good services and affordable housing.
	The hon. Gentleman should be assured that we will do everything we can to help in this difficult time for him and his constituents. We will leave no stone unturned in trying to ensure that the people in Cardigan get back into a job as quickly as possible.
	Question put and agreed to.
	Adjourned accordingly at twenty-seven minutes past Eight o'clock.